By Jackson Adams -
Millionaires can now safely enroll in Medicaid, thanks to an interpretation of Obamacare recently confirmed by the U.S. Department of Health and Human Services.
Since the expansion of Illinois’ Medicaid program under Obamacare, anyone whose taxable income is low enough automatically qualifies for the program, regardless of his or her assets.
But Clinton-era laws left those over age 55 worried they would have their assets seized for signing up to the program.
The laws were originally designed to prevent people from deliberately impoverishing themselves in order to get Medicaid to pay for their long-term, nursing home care.
Now the Obama administration is limiting the scope of these protections to encourage people that qualify to sign up for Medicaid.
“Due to the potential barrier to enrollment that future estate recovery may create for some individuals, (HHS’ Center for Medicaid and CHIP Services) intends to thoroughly explore options and to use any available authorities to eliminate recovery of Medicaid benefits consisting of items or services other than long term care [such as nursing homes] and related services,” the Center said in a letter to all state Medicaid directors.
The decision confirms that income-poor but asset-rich people, like wealthy retirees, could take advantage of the program.
“You could have a million-dollar house and be on Medicaid,” said Joy Wilson, director of health and human services policy for the National Conference of State Legislatures. “They can’t take your assets and resources into account for eligibility to Medicaid.”
Now that the threat of asset seizure has all but vanished, more people can find a way to qualify.
That’s because new provisions allow plenty of ways for people with assets to qualify for Medicaid by modifying their income using tax deductions.
Possible income deductions include payments to a health savings account, an IRA, student loan interest, certain business and moving expenses and even paying alimony, according to the Center for Labor Research and Education at the University of California, Berkeley.
State Sen. Dave Syverson, R-Rockford, works in the insurance industry. He has seen relatively well-off people qualifying for Medicaid as they seek to sign up for insurance via the new exchanges.
“We had a client come into our office who was 60, with plenty of savings, but his modified adjusted income was at the Medicaid level,” he said. “In his case he had a choice: either take free Medicaid or pay the full cost of insurance outside of the exchange.”
Syverson said that because the client was worried about the possibility of having assets seized for being on Medicaid, he opted to buy expensive insurance outside of the exchange. Even then, Syverson says he was surprised the man qualified for Medicaid to begin with.
“If you’re 60 years old and have plenty of money, we shouldn’t be giving you free health care,” he said.
Wilson is skeptical that the new rule impacts many people enrolling in the marketplace, but she warned against loosening the restrictions on who gets Medicaid.
“We can’t afford to have everybody go on Medicaid. It would be cost prohibitive for everybody,” she said. “It just doesn’t work. It’d be like if you gave food stamps to everybody.”
Lawmakers are divided on the issue.
“There are genuinely needy people who need Medicare and Medicaid, and generally I support these services when people legitimately qualify. People who need some security in life,” said state Rep. Dwight Kay, R-Glen Carbon. “What I’m diametrically opposed to is really just giving away money to anybody that applies, and we’ve made it that simple. We need to support those who are needy, but we need to start thinking very seriously about rejecting those people that could go to work or can afford their own insurance.”
Other lawmakers say assets should be off limits.
“Do we want people to get rid of their home or vehicle? Their television, or the things that they worked for when they worked?” asked state Rep. Mary Flowers, D-Chicago. “Getting access to health care for everyone is an investment in our state. It will make us more educated and healthier. A sick person cannot go to work and become a tax contributor.”
Jackson Adams is a reporter for the Illinois News Network