Salvatore LoGrande battled cancer bravely, with his daughters by his side, vowing to keep him in the cherished home he had worked tirelessly to purchase many years before. Sandy LoGrande was taken aback when, a year following her father’s passing, she received a bill from Massachusetts for $177,000. This bill was for her father’s Medicaid expenses, and the state threatened to take legal action to claim his home if the amount wasn’t paid promptly.
“The home meant everything to him,” said LoGrande, aged 57. However, this bill and the threat that accompanied it were not errors. They were part of a standard procedure mandated by the federal government. This procedure requires states to reclaim funds from the estates of deceased individuals who depended on Medicaid in their later years. Medicaid is the health insurance program funded by taxpayers, designed to assist America’s poorest.
For individuals over 55 who utilized Medicaid for long-term care, such as nursing home stays or in-home health care, their homes, usually exempt from Medicaid qualification, become subject to estate recovery. This month, a proposal was made by a Democratic lawmaker to eliminate this harsh program. Critics argue that the program recovers a minimal amount—about 1%—of the over $150 billion Medicaid annually spends on long-term care. They also point out that many states do not inform Medicaid applicants that their families could face significant bills and claims on their property after their death.
LoGrande found herself entangled in a legal battle with Massachusetts for two years after her father’s death. She had sought advice from a local nonprofit on caring for her elderly father years before he passed in 2016. They recommended enrolling him in Medicaid. LoGrande recalls inquiring about the impact on the house and was reassured that the state would only claim the house if her father was placed in a nursing home.
“He would have never agreed to anything that endangered his home,” she stated. It wasn’t until after his death, when she received the state’s demand for $177,000, that she saw the first bill for his care. This bill included charges for a hospital stay due to cancer pain, medications, and hospice care.
“That’s what devastated me,” LoGrande expressed. “It felt deceitful.” The state eventually settled with the LoGrandes in 2019, relinquishing its claim on the house. Policies around this recovery process vary significantly from state to state, as noted in a 2021 report by the Medicaid and CHIP Payment and Access Commission, which advises Congress on policy.
Some states place a lien—a legal claim—on a home, while others do not. Furthermore, while some Medicaid offices attempt to recover all medical costs from patients, others focus solely on long-term care expenses. In recent years, Alaska and Arizona pursued claims on just a handful of properties, whereas other states targeted thousands of homes, accumulating hundreds of millions of dollars.
New York and Ohio led the nation in such collections, recovering over $100 million combined in a single year, as found by a Dayton Daily News investigation. An investigation into Kansas’s program by the Health and Human Services inspector general concluded it was cost-effective, generating $37 million while spending only $5 million to recover the funds. However, the state did not always collect from eligible estates.
Last month, a call was made by the foundation of a major health insurance company for Massachusetts to revamp its process. This process involves seeking reimbursement for most Medicaid costs, beyond the federal minimum requirement of recovering long-term care expenses. The Blue Cross Blue Shield Foundation of Massachusetts suggested that the state legislature pass a law to stop these additional collections.
Estate recovery could continue to widen wealth gaps and perpetuate intergenerational poverty, according to Katherine Howitt, a Medicaid policy director with the foundation. In Tennessee, which reclaimed over $38.2 million from more than 8,100 estates last year, Imani Mfalme faced a similar situation after her mother’s death in 2021.
As her mother’s early-onset Alzheimer’s progressed, Mfalme took care of her. However, in 2015, after being diagnosed with breast cancer and needing a double mastectomy, Mfalme began exploring other options. She arranged a meeting at her mother’s home with the local Medicaid office. The representative advised her to empty her mother’s bank accounts—funds Mfalme used for her mother’s assisted living facility payments—to qualify for the program.
Mfalme felt somewhat insulted when the representative repeatedly confirmed, “This is your mother’s home?” without mentioning the possibility of having to sell the house to settle her mother’s Medicaid bill after her death. Now, Tennessee’s Medicaid office claims Mfalme owes $225,000 and is seeking a court order to force her to sell the house.
Mfalme, now 42, is willing to pay what she can, but the house holds special significance. Her mother, a Black woman, acquired her dream home in Knoxville after winning a landmark discrimination lawsuit against her former employer, Boeing, for unequal pay compared to her male colleagues.
“It’s heartbreaking to see her hard-won achievements erased because we were both sick,” Mfalme lamented. TennCare, Tennessee’s Medicaid office, declined to comment on individual cases, as stated in an email to The Associated Press.
The Medicaid and CHIP Payment and Access Commission has recommended that Congress make estate recovery optional, reversing the 1993 law that mandated it. Earlier this month, Democratic Rep. Jan Schakowsky of Illinois reintroduced legislation to end the federal mandate, criticizing it as a cruel and ineffective program that harms families and fails to yield significant returns for taxpayers.
With a divided Congress, where some Republicans seek to reduce Medicaid entitlements, the bill faces challenges in gaining the bipartisan support necessary for enactment. Nonetheless, Stephen Moses, who played a role in creating the mandate, acknowledges its shortcomings. The mandate, intended to encourage savings for long-term care to avoid reliance on public healthcare, remains poorly understood by many.