As Salvatore LoGrande battled cancer and the suffering that accompanied it, his children swore to keep him in the white, pitched-roof house he worked so hard to purchase decades before.
Sandy LoGrande thought it was a mistake when, a year after her father’s death, Massachusetts billed her $177,000 for Medicaid bills and threatened to sue for his home if she didn’t pay up soon.
“The home was everything,” LoGrande, 57, told her father.
However, the bill and accompanying threat were not a mistake.
Rather, it was part of a standard process mandated by the federal government for all states: recovering money from the assets of deceased persons who relied on Medicaid, the taxpayer-funded health insurance program for the poorest Americans.
Medicaid usually does not cover a person’s home. However, it is subject to the estate recovery procedure for persons over the age of 55 who received long-term care under Medicaid, such as nursing facility stays or in-home health care.
This month, a Democratic senator advocated ending the “cruel” program entirely. Critics contend that the program takes only around 1% of the more than $150 billion that Medicaid spends on long-term care each year. They also contend that many states neglect to advise those who sign up for Medicaid that they may face large costs and property claims after their death.
LoGrande claims this is how she ended up in a two-year court struggle with Massachusetts following her father’s death. Several years before his death in 2016, she sought guidance on caring for her elderly father from a local charitable organization. The group suggested that she sign him up for Medicaid. She also remembered inquiring about the house but was told that the state would only pursue it if it moved her father to nursing care.
“He never would have signed on with anything that would put his home in jeopardy,” she went on to say.
For years, her father received annual renewal notices from the state’s Medicaid office. She claims she didn’t see the first bill for his care until after he died when the state demanded $177,000, which included a brief hospital stay for cancer pain, drugs, and hospice.
“That’s what ripped my guts out,” LoGrande explained. “It was dishonest.”
In 2019, the state settled with the LoGrandes and waived their claim to the residence.
According to a 2021 report from the Medicaid and CHIP Payment and Access Commission, which makes policy recommendations to Congress, state rules regarding the recovery process differ greatly.
Some states will place a lien—a legal right—on a residence, while others will not. Meanwhile, some Medicaid offices attempt to recover all medical expenditures from individuals, such as doctor visits or medications, while others only seek reimbursement for long-term care. In recent years, Alaska and Arizona pursued only dozens of properties, whereas other states pursued thousands of residences for hundreds of millions of dollars.
According to a Dayton Daily News investigation, New York and Ohio led the country in such collections, recovering more than $100 million in a single year.
An investigation into the Kansas program, released Tuesday by the Health and Human Services Inspector General, found that the program was cost-effective, yielding $37 million while spending only $5 million to recover the money. However, the state did not always collect the money from eligible estates.
Last month, a foundation representing one of the industry’s largest health insurance companies urged Massachusetts to alter its procedure, which includes collecting payment for most Medicaid spending over the federal government’s minimum obligation to recover long-term care charges. The Blue Cross Blue Shield Foundation of Massachusetts urged that the state Legislature approve legislation prohibiting these additional collections.
Estate recovery “has the potential to perpetuate wealth disparities and intergenerational poverty,” according to Katherine Howitt, the foundation’s Medicaid policy director.
In Tennessee, which recovered more than $38.2 million from over 8,100 estates last year, Imani Mfalme found herself in a similar situation after her mother died in 2021.
Mfalme continued to care for her mother, whose early-onset Alzheimer’s disease progressed. But in 2015, when Mfalme was diagnosed with breast cancer and required a double mastectomy, she began to consider alternative treatments.
She hosted a meeting with the local Medicaid office at her mother’s home. The salesperson instructed her to drain her mother’s bank accounts, which Mfalme had put into assisted care facility fees for her mother so that her mother might qualify for the program.
She recalls feeling slightly irritated during the meeting when the agent asked her three times, “This is your mother’s home?” Mfalme said the salesperson made no mention of the possibility of having to sell the house to pay her mother’s Medicaid debt after she died.
Tennessee’s Medicaid office now claims she owes $225,000, and the state is seeking a court order requiring Mfalme to sell her home to repay the debt.
Mfalme, 42, stated that she wants to pay what she can, but the property is a particular source of concern. Her mother, a Black woman, bought her dream home in Knoxville after winning a landmark discrimination lawsuit against her former employer, Boeing, for underpaying her compared to her male colleagues.
“She pushed hard for equal pay and privileges. “To see that taken away because she was sick and I was sick, it’s just absolutely devastating,” Mfalme said of her mother.
The Medicaid and CHIP Payment and Access Commission’s study recommended that Congress repeal the 1993 law requiring states to recover funds from estates and instead make it optional.
Earlier this month, Democratic Rep. Jan Schakowsky of Illinois presented legislation to repeal the federal government’s mandate. Schakowsky believes the regulation is a losing proposition for families who lose their homes and taxpayers who do not see significant returns from recovery efforts.
“It is one of the most cruel, ineffective programs that we see,” Schakowsky told the Associated Press. “This is a program that doesn’t work for anybody.”
In a gridlocked Congress, where some Republicans want to cut Medicaid entitlements, the bill is unlikely to receive the bipartisan support required to become law.
At least one person admits the rule isn’t working: the man who devised it.
Many people are unaware of the decades-old law, which was designed to push individuals to save for long-term care or risk losing their home’s equity, according to Stephen Moses, who now works for the conservative Paragon Health Institute.
“The plan here was to ensure that people who need long-term care can get it but that you plan ahead to be able to pay privately so you don’t end up on the public health care program,” he added.