When Salvatore LoGrande was in the throes of a valiant battle against cancer, his daughters made a solemn vow. They pledged to ensure that he could see out his days in the white house with a pitched roof, a testament to his years of hard work. So, imagine his daughter Sandy LoGrande’s shock when, a year after her father’s passing, she was slapped with a $177,000 bill from Massachusetts. The demand? To offset her father’s Medicaid expenses, or else they’d sue for his house.
“The home was everything,” said Sandy LoGrande, 57. But the bill and the accompanying threat were not mistakes.
The Controversial Medicaid Estate Recovery Program
Unbeknownst to many, this is a routine procedure the federal government mandates from every state. It’s essentially a recovery process from the assets of deceased individuals who relied on Medicaid in their final years. Medicaid, funded by taxpayers, provides health insurance for the poorest Americans.
The typical exemption in qualifying for Medicaid is a person’s home. However, it becomes subject to the estate recovery process for those over 55 who used Medicaid for long-term care such as nursing home stays or in-home health care.
This month, a Democratic lawmaker proposed to scrap this “cruel” program. Critics argue it collects too little — roughly 1% — of the more than $150 billion Medicaid spends yearly on long-term care. Furthermore, they insist that many states fail to educate people signing up for Medicaid about the potential bills and property claims that could burden their families posthumously.
The Real-life Impact of the Program
Sandy LoGrande can attest to the shock of this process, having ended up in a two-year legal battle with Massachusetts after her father’s death. Several years before he passed in 2016, she had sought advice from a local nonprofit for caring for her elderly father. They recommended Medicaid, assuring her that the state would only target the house if her father was sent to a nursing home.
“He never would have signed on with anything that would put his home in jeopardy,” she said. But it wasn’t until after his death, when the state demanded $177,000, that she saw the first bill for his care.
“That’s what ripped my guts out,” LoGrande said. “It was dishonest.” The state eventually settled with the LoGrandes in 2019 and released its claim on the house.
The Debate and Proposed Changes
State policies around the recovery process vary greatly, as outlined in a 2021 report from the Medicaid and CHIP Payment and Access Commission, which provides policy recommendations to Congress. Some states put a lien on a home, while others do not. Some Medicaid offices attempt to recoup all medical costs from patients, like doctor visits or prescriptions, while others only pursue long-term care costs.
Just last month, the Blue Cross Blue Shield Foundation of Massachusetts called on the state to overhaul its process. The foundation recommended that the state Legislature pass a law that would prohibit these additional collections. Katherine Howitt, a Medicaid policy director with the foundation, explained that estate recovery “has the potential to perpetuate wealth disparities and intergenerational poverty”.
The Medicaid and CHIP Payment and Access Commission’s report recommended that Congress reverse the 1993 law that required states to recover money from estates, instead making it optional. Democratic Rep. Jan Schakowsky of Illinois has reintroduced legislation that would end the federal government’s mandate, calling it a “cruel, ineffective program”.
As it stands, in a gridlocked Congress with some Republicans looking to trim Medicaid entitlements, the bill is unlikely to gather the bipartisan support needed to become law. But whether it does or not, the conversation has begun, and the severity of its impact on families like the LoGrandes is becoming increasingly clear.
