Coloradoans might find some of the new rules established by the Affordable Care Act to be complicated or surprising. One such rule involves the fact that people enrolled in expanded Medicaid might now be subject to government asset attachment when a beneficiary dies. In theory, this could mean that the heirs of a Medicaid beneficiary could see their inherited assets taken by the government in an effort to receive reimbursement for the aid. While not all states are currently planning to take action on this measure, Colorado has recently indicated that it will indeed go after an estate’s assets in order to repay Medicaid benefits. While it’s yet to be determined if this will happen with any real frequency, the statute could nevertheless play an interesting part in the long term care planning decisions made by aging people in the state.
The process is known as “estate recovery,” and it’s important to know that the government will only take into account expanded Medicaid benefits that a person received at age 55 and older. People on Medicaid who are younger than 55 will not face the threat of asset attachment. This procedure is not exactly new, as a law passed in 1993 allowed state governments to pursue repayment from Medicaid beneficiaries’ estates. At the time, however, Medicaid was operating quite differently, and most people who were healthy but poor found it nearly impossible to get enrolled in the program. Now that Medicaid has been expanded, many more low-income people can enroll, but they’ll be subject to the old laws.
This issue raises the question of whether it would be better for older Coloradoans to get on Medicaid or not. One important thing to consider is that the cost of a medical emergency could force a low-income person to raid their own assets anyway if they’re not insured. Also, over time, it might be revealed that the Colorado government will only follow through on this process in rare instances.
Source: Consumer Reports, “Will Medicaid take my house when I die?” Nancy Metcalf, Jan. 27, 2014