In Washington, Salvatore LoGrande battled cancer with the unwavering support of his daughters, who vowed to keep him in the cherished home he had worked tirelessly to purchase over the years. However, Sandy LoGrande was taken aback when, a year following her father’s passing, she received a bill from Massachusetts for $177,000. This bill covered her father’s Medicaid expenses, and the state threatened to take legal action against the home if the amount wasn’t paid promptly. Sandy, 57, emphasized how much the home meant to her father.
The bill and the threat to sue 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 relied on Medicaid in their later years. Although a person’s home is usually not considered when determining Medicaid eligibility, it becomes part of the estate recovery process if the individual was over 55 and used Medicaid for long-term care, such as nursing home stays or in-home health services.
This month, a Democratic lawmaker introduced a bill aiming to eliminate this “cruel” program. Critics argue that the program recovers a minimal amount—about 1%—of the over $150 billion Medicaid spends annually 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.
Sandy LoGrande found herself entangled in a two-year legal battle with Massachusetts following her father’s death. She had sought advice from a local nonprofit on how to care for her aging father years before, leading to his enrollment in Medicaid. Despite inquiring about the implications for her father’s house, she was reassured that the state would only claim the house if her father was placed in a nursing home.
Her father received annual Medicaid renewal notices, but it wasn’t until after his death that Sandy saw the first bill for his care, which included hospital stays for cancer pain, medications, and hospice care. “It was dishonest,” Sandy expressed, deeply hurt by the situation. The state eventually settled with the LoGrandes in 2019, releasing its claim on the house.
State policies on this recovery process vary significantly, with some states placing liens on homes and others not. Additionally, while some Medicaid offices attempt to recoup all medical costs from patients, others focus solely on long-term care expenses. The approach to estate recovery can differ greatly from one state to another, with some states pursuing thousands of homes and recovering millions of dollars, while others target far fewer properties.
An investigation into Kansas’s program found it to be cost-effective, but the state did not always collect eligible money from estates. Meanwhile, Massachusetts faces calls to reform its process, which includes seeking reimbursement for most Medicaid costs, beyond just long-term care expenses. This practice has been criticized for potentially exacerbating wealth disparities and intergenerational poverty.
In Tennessee, Imani Mfalme encountered a similar situation after her mother’s death in 2021. As her mother’s Alzheimer’s progressed, and Imani faced her own health challenges, she explored Medicaid as an option. However, she was not informed that her mother’s home could be targeted to settle Medicaid bills after her death. Now, Tennessee’s Medicaid office is seeking a court order to force the sale of the house to cover a $225,000 bill.
Democratic Rep. Jan Schakowsky of Illinois recently proposed legislation to end the federal mandate for estate recovery, criticizing it as cruel and ineffective. However, with a divided Congress, the bill faces significant hurdles.
The mandate, which dates back decades and was designed to encourage saving for long-term care, is now under scrutiny. Stephen Moses, one of the architects of the policy, acknowledges its shortcomings, highlighting the need for individuals to plan ahead to avoid relying on public healthcare programs.