July 2nd, 2009

Writes Jeffrey A. Marshall, president-elect of the Pennsylvania Association of Elder Law Attorneys, in an op-ed for the Times-Leader: 

MONEY IS tight in Harrisburg. And tough times can lead to terrible decisions. One example is the governor’s budget proposal to expand estate recovery, which is part of House Bill 1351.

Estate recovery is based on a federal law that requires Pennsylvania to try to recoup the costs of long-term care paid by Medicaid. In a curious exercise of government-mandated age discrimination, the recovery program applies only to people who are over age 55.

Medicaid, not Medicare, is the largest government source of payment of long-term care. Most people who reside in nursing homes have part of the cost of their care paid by Medicaid. And many frail seniors who are able to reside at home with help from their family also get limited financial assistance from Medicaid.

As a result of the estate recovery laws, if Medicaid helps pay for your care, your estate is forced to repay the government after you die. The program is, in effect, a Medicaid “death tax” imposed only on the non-wealthy elderly. Although Pennsylvania and its residents bear the costs and burdens of collection, most of the money collected goes to the federal government.

Estate recovery was first implemented in Pennsylvania in 1994. For the past 15 years, the state has wisely limited its scope to the minimum required by federal law – collection from the probate estate of the recipient of Medicaid. This means that, at the death of a Medicaid recipient, a jointly owned home or farm can pass free of state lien to the surviving spouse.

Unfortunately, in a misguided attempt to collect additional revenues, the governor has broken with tradition and proposed expanding estate recovery to reach jointly owned assets.

Read the rest of Marshall’s op-ed to find out more about the proposal, and for an example of how it will affect people in certain situations.