Salvatore LoGrande’s family faced an enormous surprise debt after his demise due to the federal government’s estate recovery program, which seeks to offset Medicaid costs by claiming assets from deceased recipients over 55 who received long-term care aid. The system aims to relieve financial strain on Medicaid, but often heavily impacts low-income beneficiaries and their family. The debt left LoGrande’s family at risk of losing their home and their story is far from singular, stirring considerable debate regarding the program’s fairness and effectiveness.
Critics argue the program only recoups 1% of Medicaid’s yearly $150 billion long-term care spend. They highlight a lack of information from Medicaid regarding responsibilities for future family members. Critics also state the program inherently hurts lower-income families who lack resources for complex estate planning to avoid recovery. The fear of property seizure may deter seniors from applying for Medicaid, potentially causing them to avoid needed medical care.
After LoGrande’s death, his daughter detailed a painful two-year legal battle arising from the lack of information about such consequences from Medicaid. The endeavor ended positively for the family in 2019, when attempts to seize the home were dismissed. This decisive victory allowed the family to begin healing from their loss.
Considerable state-to-state differences exist in the recovery of Medicaid funds, with some states claiming properties and others not. Furthermore, the goal differs whether to reclaim all healthcare costs or exclusively those related to long-term care – understandably causing distress and confusion for beneficiaries. Hence, calls to standardize Medicaid recovery practices across states are increasingly common.
The Dayton Daily News found significant state recovery discrepancies. New York and Ohio were the ‘top earners’, collectively reclaiming over $100 million each year, while states such as Alaska and Arizona had minimal recoveries. These variations may yield substantial nationwide implications, necesitating further research.
The Blue Cross Blue Shield Foundation and Medicaid policy director Katherine Howitt have voiced concerns that ramped up estate recoveries could exacerbate wealth inequality and perpetuate generational poverty. This stands in stark contrast to states like Tennessee, which reclaimed over $38.2 million from more than 8,100 estates in the last year alone. As such, these recovery efforts are the focal point of ongoing policy debates as they have both beneficial and adverse effects.
