Nearly every state has a Medicaid estate recovery program to recoup some of the costs of deceased patients’ long-term care. However, most recipients and their families don’t know such programs exist and are unaware of downstream implications.
In a new report on Medicaid estate recovery, AARP notes that Medicaid is different from other public programs in that it is the only one that may require bereaved loved ones to repay some of the costs of care after Medicaid initially pays for it.
In many cases, state efforts to recoup long-term care costs come as a shock to recipients’ families, AARP says in the report.
“A lot of times, it’s ‘Sorry for your loss – by the way, you owe this amount,’ “ said Wendy Fox-Grage, public policy director for AARP and lead author of the report. To alleviate the surprise of this financial blow, state Medicaid programs must improve efforts to make estate recovery information clear to Medicaid recipients, she said.
“The notices (recipients) receive need to be timely, clear, easy to read, in a font size they can see, and they need to include vital information,” Fox-Grage said.
She said many states’ notices to recipients lack key information about exemptions, hardship waivers and consumer obligation. To help states improve their notices, AARP has developed model forms that combine the better elements of various states’ notices.
But none of this would be necessary if there was a better way for Medicaid to finance long-term care costs, or if those costs were simply more affordable.
Current recovery efforts yield returns of 0.61 percent of the amount Medicaid spends on long-term care annually, despite a recent $411 million increase in the average state recovery total.
While most families of patients who receive long-term care paid by Medicaid are not affected by estate recovery efforts, those who are often are devastated by the costs.
“The current system really isn’t a system,” said Marsha Greenfield, senior legislative counsel for the American Association of Homes and Services for the Aging. “It’s not satisfactory to the government, and it’s not satisfactory to individuals.”
AAHSA suggested in a 2006 finance report that the nation adopt an insurance model for long-term care rather than relying on pay-as-you-go Medicaid. This would more equitably spread the financial risk of receiving long-term care, the report contends. “We need to look beyond ‘pay for yourself or go on Medicaid,’” Greenfield said.
One way to make long-term care more affordable would be to put more money into home care, which may reduce overall treatment costs, Fox-Grage said.
If pre-emptive care is delivered in the home, the patient may not need to be placed in long-term care settings, she said.
“Nursing homes aren’t the only way that people can obtain care, and that’s really the only part we finance through Medicaid,” Greenfield noted.
“Roughly four out of 10 long-term care dollars goes to home care, and the other six goes to institutional care,” Fox-Grage said. “In many cases, providing services in the home can be done in a much more cost-effective way than in an institution.”
And, she added, that’s where most patients prefer to receive care – in their own homes.