Reader asks: Can Medicaid lien assets upon death? (Yes, it can)

Two Garys, two questions.

We help them both sort out their concerns this week with answers on an unpleasant surprise for some new Medicaid enrollees, and how Americans’ lifestyles affect health care costs.

■ Gary, last name withheld, is concerned about enrolling in Medicaid: I read that the expansion of Medicaid has a dark issue. Now that I receive Medicaid, upon my death, the government will lien my assets. At the present time, my house is underwater, but by the time I die, there may be some equity, which I had hoped would pass to my children. But the government has something called “asset recovery.” Please say it isn’t true.

So, Gary, we hate to tell you this: It’s true.

Asset recovery isn’t part of the Affordable Care Act. The federal government has required states since the early 1990s to recover Medicaid costs from the estates of people older than 65 who use the federal program to pay for nursing-home or in-home care, hospital stays and prescription-drug services, as well as from enrollees who have Medicaid as their primary insurance from ages 55 to 64.

You’re suddenly hearing about this along with Obamacare because the law expands the number of adults ages 55 to 64 who are eligible for Medicaid. That means a lot more consumers are, like you, getting a big shock when they learn about the government’s asset-recovery rights. Plus, expanded Medicaid verifies eligibility based on incomes, not assets, said Kim Boyer, owner of Boyer Law Group in Las Vegas and an expert on eldercare and Medicaid rules. So people may qualify if they have both lower incomes and assets, such as home equity or retirement accounts, Boyer said.

Once you’re enrolled, you are on the hook after you die. Nevada can come after your estate to recoup every last dollar of the medical benefits Medicaid paid to you. So if you run up a $200,000 tab on a quadruple bypass, your estate will have to pay it back, if it can. Nor is there any limit on the types of assets the state can take. The basic idea is, if you have value stashed in your home, investments or possessions, it’s not fair to let you draw down federal entitlements, Boyer said.

There are limits, though. The state cannot collect assets from a deceased Medicaid enrollee who’s survived by a spouse, a child younger than 21 or a blind or disabled child of any age. If you share a home with a sibling, the state can’t collect, either. Officials can file a lien against those assets, but they generally won’t execute the lien until your spouse, child or sibling dies. What’s more, states have to waive estate recovery if it would cause undue hardship, though Boyer said hardship is difficult define. So, to ease one of your big concerns, Gary, your wife won’t be out on the street should you pass away with equity in your house.

You can find ways around asset recovery, including putting your home or other assets in someone else’s name. But you may have to transfer assets years ahead of enrollment to qualify, and you risk losing those assets in case of divorce or family discord.

“Generally, people are not ready to give up their independence and autonomy just to keep the government from taking their assets,” Boyer said.

Gary, you also wanted to know why you weren’t given the choice to opt out of Medicaid and purchase a private plan to avoid asset recovery. You actually do have the right to unenroll from Medicaid, go to an insurance broker and ask him or her to find you an individual, private plan outside the state exchange’s system, Boyer said.

■ Gary Stange dreams of a utopia in which we bend the health cost curve down by, you know, maintaining a healthy weight and not smoking. He writes: We have too many people in this country who think they have a right to do what they want, and that their self-gratifying choices have no consequences and do not affect others. They are wrong! Do you realize how much health care costs would drop if people would take care of themselves?

If the numbers are to be believed, Gary, costs might drop a lot.

The Centers for Disease Control and Prevention pegged the number of Americans who are overweight or obese at 69.2 percent in 2010. That’s about 215 million people. And 19 percent — or nearly 60 million — smoke (there’s some overlap between the two). Nevada’s rate of obesity and overweight is a little lower than average, at 60.3 percent. But our smoking rate is higher, at 22.2 percent.

Both obesity and smoking are linked to cancer, heart disease and stroke, according to the CDC. And they weigh heavily on U.S. health spending: Obesity cost the system nearly $150 billion in 2008; a 2011 study from the National Institutes of Health found that America’s obesity rate explains as much as 35 percent of the country’s lower life expectancy as compared to other developed nations.

Meanwhile, smoking cost the country more than $193 billion in extra health care costs in 2004. What’s more, a June report from the Ohio State University found that employees who smoke cost a company $6,000 a year more than nonsmokers — and that factors in any pension or retirement-plan savings that come when a smoker dies prematurely. (It is worth noting that some research shows smokers and the obese may save the system money long term by dying younger.)

Then there are other preventable problems that affect U.S. life expectancy: A 2007 report from Texas A&M economist Robert Ohsfeldt found that if you control for murders, suicides and car accidents, the nation has the top life expectancy among developed countries in the Organization for Economic Cooperation and Development.

The Affordable Care Act has provisions designed to curb obesity and smoking. The law requires insurers to cover, free of charge, screening and counseling for obesity and tobacco-cessation therapy. That means patients won’t have to pay for weight-loss guidance or help quitting cancer sticks, as long as they’re working with a doctor in their network.

The law also mandates that restaurant chains and grocery stores eventually start putting calorie details on prepared foods, though a 2013 study from New York University’s Langone Medical Center said such menu labeling hasn’t affected consumer choices where it’s been tried.

As for smokers, Obamacare lets insurers charge them as much as 50 percent more on their premiums as an incentive to get them to stop.

But Robert Jeffery, a professor of public health at the University of Minnesota, said those measures might not go far enough.

“Banning the sale of tobacco products would certainly reduce the use of those products and the health problems they cause,” Jeffery said. “Why we have not done that is as mysterious to me as why we don’t do more to reduce the number and lethality of firearms.”

Limiting or taxing products such as sugar-sweetened beverages or the use of salt in processed foods could also help, Jeffery said. But “all of these measures are difficult politically because of public opinion and vested commercial interests,” he added.

You’re also going against human nature, Gary.

“People find exposure to these products pleasurable and the health care consequences are very much delayed,” Jeffery said. “Immediate rewards are much more powerful in guiding behavior than delayed ones most of the time.”

Have a question or comment you’d like to run by Obamacare Explained? E-mail jrobison@reviewjournal.com, or tweet @J_Robison1.