Picture this scenario: You’ve lost a loved one and inherited that person’s home. But while you are still grieving the loss, you’re informed the state is seizing that property you just inherited. It can happen if your loved one was on Medicaid, as one Charlotte family found out — the hard way.
Safiya Charles wrote about it for Type Investigations and the Assembly and joins "Morning Edition" host Marshall Terry to discuss.
Marshall Terry: You're reporting focused on the family of Cleveland Hager, a Charlotte woman who died in 2020. What happened to them?
Safiya Charles: Ms. Hager had been enrolled in Medicaid for many years. She was elderly, but she was an active woman who took care of herself. You know, she paid her own bills and she lived on her own and then had an accidental slip and fall at home. So she went from living very independently to needing care and assistance for her family. The best decision was that Ms. Hager move into a nursing home.
Things were going well, but then the pandemic hit. And like many elderly folks who were living in nursing facilities, they just weren't able to have that face-to-face contact and maintain those social ties that are so important, particularly at that age. And Ms. Hager passed away unexpectedly about a month later.
Her family received a six-figure bill from the state for the cost of her care over about a two-year period — and that came as a big shock to them.
Terry: So the issue here is something called the Medicaid Estate Recovery program. What is that and why does it allow the state to seize your property?
Charles: So Medicaid is really a jointly funded program. The federal government pays a portion and states pay a portion. Medicaid is also a means-tested program. So it's really meant to help those who would be considered the poorest or most vulnerable in our society.
What the Medicaid Estate Recovery program allows states to do is to recoup money that they've spent on long-term services and support so that nursing home care or having home-based caretaking services, prescriptions or things related specifically to that care. You know long-term care is very expensive. It's also very expensive for the government to shoulder this.
So in 1993, they made it mandatory that states attempt to recoup the money spent on these services from the estates of the deceased Medicaid recipients, in the hopes that it would help states to replenish these funds and keep the program going.
When you're attempting to qualify for Medicaid, your home is not counted as an asset. That would put most people over the line. But when it comes to estate recovery, that home is absolutely counted as an asset that the state can seize to pay off Medicaid debt. So this is part of the confusion — for the surprise that some people are faced with after the death of a loved one.
Terry: And this is what happened to the family of Cleveland Hager. Right?
Charles: Yes.
Terry: Can people appeal this?
Charles: Yes, they can. It's federal law that every state must have a process that a person can seek undue hardship. For example, if there is a blind or disabled child living in the home, or if the estate of the deceased Medicaid recipient includes a farm, let's say, and that farm is the sole income-producing asset for the living beneficiaries, depending on the state's criteria, they may be eligible for an undue hardship.
What I learned from attorneys and advocates was that often people don't know that they can request an undue hardship waiver. And that there's a time frame to request that appeal. In North Carolina, it's within 60 days of receiving the estate recovery notice.
The other thing to remember is that, again, this is a program meant to serve the poorest in our society. So when faced with this, it's going to be harder for them to afford an attorney who can take care of this. And, sadly, many legal aid organizations are already strapped, and few really have dedicated people who are knowledgeable about this specific area of law.
And let's not forget the state is required to notify the deceased's estate within 30 days of their death. That means you're coming to people who have recently experienced a family death and are in the thick of the grieving process. That letter is more than likely a shock, and figuring out what to do or summoning the energy to jump into action within that 60-day time frame you have to request undue hardship, that can be a challenge.
Terry: Since this affects the heirs of people who were on Medicaid, is there an equity issue here?
Charles: There is. First, I'll say that no other federal program functions this way. You know, if you've managed to buy a home and pay off the mortgage, this is a big asset that could really change the trajectory of future generations of a family.
Another thing is if we look at the data on who's using Medicaid as a whole, we see that there are more people of color who are enrolled in the program. The advocates and attorneys I spoke with said they saw an outsized number of Black and brown people who were dealing with this.
Lastly, returning again to the fact that how Medicaid and state recovery programs are run are different state by state. So where, for example, in North Carolina, the government only has access to what's in the probate estate. In Oregon, for example, they can go after far more assets. So depending on where you live, you may lose more or less.
Terry: Congresswoman Jan Schakowsky, of Illinois, has introduced a bill that would allow states to end the Medicaid Estate Recovery program. What's the argument for ending it?
Charles: You know, if the goal is to put money back into the program to help fund it, then this really isn't that helpful at all.
There's a nonpartisan agency that makes recommendations to Congress called the Medicaid and CHIP Payment and Access Commission. They did an analysis of Medicaid data in 2021 that showed Medicaid estate recovery recouped less than 1% of annual fee for service spending on long-term care between 2015 and 2019. That's a drop in the bucket. But for these families, it's everything.
Terry: I want to circle back to the family of Cleveland Hager of Charlotte. What happened with them and their appeal?
Charles: Although the family's application for undue hardship was approved. This January, they received a notice stating that Kendra, who is the granddaughter of Ms. Hager, no longer qualifies. So obviously this has created frustration and anxiety for the family as they are unsure exactly why this is happening.
North Carolina recently changed its recovery policy so that instead of waiving a debt. Undue hardship actually functions really as a referral. Their attorney is currently working to get answers.
