A recent news report from ABC News caught my eye and should raise the eyebrows of all 85,815,827 Americans enrolled in Medicaid, 26 percent of the U.S. population.
After the patient dies, his or her inheritors can lose their homes and/or their retirement savings to pay back Medicaid’s “free” medical care.
Massachusetts Medicaid enrollee Salvatore LoGrande recently lost his battle with cancer after extensive medical treatment. Before he died, he remarked how proud he was that he had paid off the family home and could leave it free-and-clear to his daughter, Sandy. (READ MORE from Deane Waldman: Insuring Illegals Takes Care from ‘Legals’)
After his death, Sandy was shocked to receive a bill from Massachusetts Medicaid for $177,000, payable within 30 days. The MERP man had come to collect.
Eight years ago, I warned the public about MERP. Few people paid attention. MERP (Medicaid Estate Recovery Program) remains in effect and is well hidden. MERP is, as Paul Craig Roberts, Former Assistant Secretary of the Treasury for Economic Policy, said, “a pernicious death tax on those who have the least and are the most vulnerable.”
Medicaid rules allow each state to recover the cost of care from the estates of deceased Medicaid recipients, plus an admin fee. The children and heirs of people enrolled in Medicaid who eventually die must pay the state government back. This fact is very poorly publicized and not well known. Some states include estate recovery in very fine print in the eleven-page Medicaid contract. Other states hide it entirely.
It has been said that medical expenses during the last six months of life can exceed all prior medical costs over the person’s lifetime. Mr. LoGrande’s bill is not unusual, except that it may be atypically low! My neighbor’s bill for six months’ chemotherapy for lymphoma was $494,000. (She survived.)
In addition to the cost of care, MERP assigns an administrative fee of up to $73,320. Thus, typical MERP bills are several hundred thousand dollars. These bills are handed to those least able to pay the government back. They qualified for Medicaid and thus are on the lower end of the income scale.
When a Medicaid family cannot pay these huge sums, state government is entitled to attach a lien on property or even pension funds. That is how the LoGrandes are losing their house.
Each state chooses to implement as much or as little of the MERP claw-back provisions as it wishes. In 2015, New Mexico (NM) essentially chose not to invoke MERP. Despite the large number of Medicaid enrollees, 815,000 individuals (forty percent of state population) and despite a $417 million budget shortfall, NM Medicaid chose to claw back a total of $9,000.
Other cash-strapped states, such as California, Illinois, Connecticut, and obviously Massachusetts, take the opposite approach and grab whatever they can.
If you are waiting for data such as how much was collected and how many people were ensnared, you will wait forever. The states rarely release data to the public on their MERP programs. I was only able to acquire information on New Mexico because, at that time, I was inside the government as Director on the New Mexico Health Insurance Exchange Board. I cannot proffer data on other states as that information is not available. The public only gets to know what’s going on when some family like the LoGrandes make their stories known. (READ MORE: There’s a Tiny ‘Bubble’ That Could Save Healthcare)
MERP, by its nature, is a clandestine program and comes as a great and most unwelcome surprise bill to the families. Even as Washington passes legislation to stop care providers from handing patients “surprise bills,” state Medicaid programs are presenting patients’ families with a terrible surprise bill right after they lose their loved one.
Though former President Obama said he would make his administration “the most transparent in history,” the correct adjective for MERP is opaque. At a time when Washington is passing mandates for price transparency for medical providers, they still abide by the cynical but accurate aphorism, “rules [transparency] for thee but not for me.”
Americans have been led to believe that Medicaid is a no-charge medical insurance program funded by both the federal and state governments. True, there is no-charge to the person receiving the care. After the patient dies, his or her inheritors can lose their homes and/or their retirement savings to pay back Medicaid’s “free” medical care.
Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at Texas Public Policy Foundation; former Director, New Mexico Health Insurance Exchange; and author of the multi-award winning book Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine.