|
Budget
Proposal Targets Homes of Seniors
By
Jeffrey A. Marshall, CELA*
If you are old and need financial
help to meet your care needs, the Governor wants
the government to take your home or farm when
you die.
Pennsylvania House
Bill 1351, introduced by Representative Dwight
Evans of Philadelphia, proposes to expand
the Medicaid Estate Recovery program. Estate
recovery is a based on a federal mandate that
requires Pennsylvania to try to recoup the costs
of long term care paid by Medicaid. Medicaid,
not Medicare, is the biggest government source
of payment of long term care.
Most people who reside in nursing homes
have part of the cost of their care paid by
Medicaid. And
many frail seniors who reside at home with help
from their family also get some assistance from
Medicaid.
As a result of the estate
recovery laws, if Medicaid helped pay for any of
your care your estate will be forced to repay
the government after you die.
In a curious exercise of age
discrimination, the recovery program only
applies to people who are over age 55.
Essentially, estate recovery turns government
financial help to frail seniors of modest means
into a loan program with collection taking place
at death.
Estate recovery is, in effect, a
Medicaid “death tax” imposed only on the
elderly. The program has been referred to as
“picking the bones of the poor,” and
“sucking the last ounce of blood from the
corpse.” Because
most assets must be spent before a senior
becomes eligible for Medicaid, recovery efforts
focus on real estate – mainly the home or
family farm.
Although Pennsylvania and its citizens
bear the costs and burdens of collection, most
of the money collected goes to the federal
government.
Estate recovery was first
implemented Pennsylvania in 1994. For
the past 15 years, Pennsylvania has wisely
limited its scope to the minimum required by
federal law – collection from the probate
estate of the recipient of Medicaid.
This means that a home or other property
owned jointly by a husband and wife can pass
free of state lien to the survivor never
personally received Medicaid.
Now the Governor has now broken
with tradition followed by both Democratic and
Republican Administrations and proposed
expanding estate recovery to reach assets owned
with a spouse or any other person.
Here is an example of how this proposal
will work.
When John came back from Korea he
took over working the family farm.
Eventually, John and his wife Mary
inherited the farm from John’s parents.
John and Mary were always “dirt
poor.” But
they worked hard their whole lives and raised
two fine sons.
They were proud when both of the boys
graduated from Penn State.
They were even more proud when both of
the boys came home to help their father work the
farm.
In 2000 Mary’s health began to
decline due to Parkinson’s disease and
dementia. Everyone
in the family pitched in to care for Mary and
keep her home.
In 2005, after 5 years of struggle, the
family needed some outside help.
They applied for home care that was paid
for by Medicaid.
This extra help, combined with the
ongoing care by John and the boys and their
wives, allowed Mary to stay at home for another
full year. In 2006 the Office of Aging finally
advised the family that it was no longer
appropriate to care for Mary at home.
She moved to a local nursing facility.
John could not fully afford the nearly
$8,000 a month cost and Medicaid benefits were
needed.
Mary died in January 2009.
She was 84.
Three weeks later John got a letter in
the mail from the Government.
The letter said Pennsylvania was
owed $171,386 for the Medicaid that was provided
for Mary’s care, both at home and in the
nursing facility.
John was relieved to learn that under
current law, the farm is not exposed to this
state lien.
John can keep the farm and pass it on to
his boys when he dies.
This will all change under the
Governor’s proposal. Under expanded estate
recovery, the state will have a $171.386 lien
against the farm.
This will create problems for John and
the boys if they need to borrow for the farm
operation. And
when John dies, his family will need to find
some way to pay off the state lien. Most
likely, the farm will have to be sold.
Under Governor Rendell’s
proposal estate recovery will be expanded to
apply to any type of asset in which an older
Medicaid recipient has any interest.
This will include joint accounts, trusts,
life insurance, annuities “and other assets in
which the deceased individual had any legal
title or interest at the time of death.” Lawyers
and bankers and real estate title companies are
opposed to this expansion because it will add
confusion to the ownership of property, raise
costs for consumers and business alike, and add
complexity and additional expense to the
settlement of estates.
But even worse, the fear of losing their home to
estate recovery deters seniors from getting the
care they may desperately need. As a
result, organizations like the Pennsylvania
Alzheimer’s Association Public Policy
Coalition and the Pennsylvania AARP oppose
expansion of recovery.
Failing to provide needed care puts both
the senior and caregiver at risk and is likely
to ultimately increase the cost of care.
Normally in Pennsylvania,
controversies involving the debts of a decedent
are decided in Orphans Court by our elected
judges. In an excess of hubris, the Governor’s
proposal, currently contained in
Section 1412 of House Bill 1351, sets up the
Department of Public Welfare as the sole arbiter
of the amount and validity of its recovery
claim. It
is judge, jury, and executioner.
Orphan’s court review of the state
agency’s decisions is foreclosed.
The Governor’s office projects
that expanded estate recovery will add $2.6
million annual in collections.
However, this figure fails to account for
the costs of the additional burdens placed on
business and the citizens of our Commonwealth.
It doesn’t factor in the loss of local
tax revenues as homes fall into disrepair.
And it doesn’t account for the costs
that will result when infirm seniors do not
receive the care they need or are subjected to
abuse. Those costs will be paid by the people
and by the government.
These are tough times for all of
us, including the state government.
But helping people get the care they need
at the end of their lives should not give the
government the right to take our property. Much
more than money is at stake in the battle over
estate recovery. Thousands of Pennsylvania
families are struggling, often magnificently, to
do the right thing for their loved ones. We
need to support our families and caregivers, not
take their property.
Expanded estate recovery is part
of the Governor’s budget proposal and will
likely be enacted this July unless citizens make
their voices heard in Harrisburg.
Call or write or e-mail the Governor and
tell him you oppose expanded estate recovery.
Here is his contact information:
Governor
Edward Rendell
225
Main Capitol Building
Harrisburg,
Pennsylvania 17120
Phone:
(717) 787-2500
Fax:
(717) 772-8284
http://sites.state.pa.us/PA_Exec/Governor/govmail.html
Also, be sure to contact your
state legislators – ask them if they will be
voting in favor of expanding the Medicaid death
tax. Tell
them you don’t want to expand the
government’s right to take your property after
your death.
Let them know how you feel about the
proposal to expand estate recovery.
You can find your legislators names and
contact information at the following website:
http://www.legis.state.pa.us/cfdocs/legis/home/find.cfm
*Jeffrey
A. Marshall is Managing Attorney of Marshall,
Parker and Associates and President-Elect of
the Pennsylvania
Association of Elder Law Attorneys.
Return
to Expanded Estate Recovery Resource Page
|
