You may be eligible for an exemption from having to pay a penalty for being uninsured if you meet specific requirements--for example, if you are in jail, if you have a sincerely-held religious belief that prevents you from seeking and obtaining medical care, if you are eligible for Medicaid under its expansion but live in a state that opted not to expand Medicaid, if you are a member of an Indian tribe, and several other situations. But there is no exemption for people who refuse to sign up for Obamacare because of the Medicaid estate recovery program.
Since the plans at the Obamacare exchanges are income-based, you may be put into Medicaid when you apply for insurance. Or, you may start off enrolled in a subsidized plan, confident that estate recovery won't apply to you, but several months or a year later, due to a change in your circumstances, find you have been tossed into Medicaid. You can increase your income in order to avoid Medicaid, but it would have to remain over 138 percent of the Federal Poverty Level throughout the taxable year. If paying for insurance will deprive you of food or shelter, you can try filing for a hardship exemption, that is, if the government site is working smoothly, and if you can find the form. It is important to understand how this income-based scheme works so you can figure out how best to survive the many caveats of Obamacare. To learn more and what to watch out for, read my lesson on how Obamacare works.
Estate recovery was not an unintended consequence of Obamacare. The House Ways & Means Committee and The House Energy & Commerce Committee share jurisdiction over health care, including Medicare and Medicaid, and both worked extensively on Obamacare. So, don't bother thinking that the members of these committees didn't know that estate recovery would impact millions of Americans who would be tossed into Medicaid. The asset test was dropped and the age limit was increased explicitly in order to expand Medicaid. Yet, did We the People hear any concern about estate recovery? Certainly not in the many floor speeches given by Democrats as well as Republicans or from the media.
Obama stated during his 2008 presidential campaign that transparency would be the leverage needed to ensure that people stay involved in the national health care reform process. The expansion of Medicaid was part of the process. Did Obama or your representatives tell you that Medicaid, depending on your age, is a loan subject to deferred payment by your estate? Did they tell you the government subsidy for a private plan at an exchange is a loan, that must be repaid if your income increases? Transparency was highly selective. The bait was shown but not the hook.
Obama also often made the point that the public should receive the same level of coverage and care as members of Congress. Medicaid is hardly the same level of coverage and care, but, aside from that, tell us, Mr. Obama, because your health care is funded by taxpayers, will your estate be subject to recovery?
The fact that Obamacare did not revise existing federal statute -- in other words, it retained estate recovery -- most certainly undermines the compassionate rhetoric about helping low-income and poor Americans.
Official Response To Estate Recovery Inquiry
In October 2009 during the national health care reform debacle, eight public-spirited citizens, dismayed as they watched Obamacare morph into deception, signed and faxed a letter to 28 members of Congress, Democrats and Republicans alike, including chairs and ranking members of the various health care policy committees working on Obamacare. The letter addressed "Discrimination, Estate Recovery & Exploitation in National Mandated Health Insurance." Other recipients included President Barack Obama; Kathleen Sebelius, Secretary of Health and Human Services; and Nancy Ann Deparle, Director of White House Office of Health Reform.
The letter pointed out that absence of choice for Medicaid-eligible citizens other than a costly penalty is discrimination based on economic status. It also stated that the Medicaid estate recovery program discriminates by age and against those who own a home and have other assets versus those who do not. The letter asked if OBRA 1993 had been amended so states would not be allowed to recover assets or place liens on property under national mandated health insurance, and, if there was no amendment, why not?
The citizens who sent the letter received no response from Congress or the Obama administration. The government that comprises ObamaNation, Inc. serves only its money masters.
Depending on their state of residency, Americans can sign up for Obamacare coverage with a federal or with a state exchange. The US Centers for Medicare and Medicaid Services (CMS) is the federal office that established the federal exchange at healthcare.gov at which residents of the 36 states that chose not to use a state exchange can sign up for Obamacare. (New Mexico and Idaho have state exchanges but are currently using the federal one.) Fourteen states and the District of Columbia submitted proposals, which were approved by CMS, to run their own exchanges.
In June 2013 a letter was sent to the Centers for Medicare & Medicaid Services by a well-informed citizen pointing out that the Medicaid Manual prepared by CMS to provide guidance for states contains procedural rules intended to ensure that individuals are informed about estate recovery before they complete the application process.
There are variations in the ways in which states implement estate recovery, depending upon their Medicaid program and state laws. However, Federal law requires all states to incorporate the following protections for Medicaid recipients into the design of their estate recovery program:
-- The State should notify Medicaid recipients about the estate recovery program during their initial application for Medicaid eligibility and annual re-determination process.
-- The State must notify affected survivors about the initiation of estate recovery and give them an opportunity to claim an exemption based on hardship.
-- The State must establish procedures and criteria to waive recovery if it would cause undue hardship.
The letter went on to say that the final CMS Health Insurance Marketplace application (healthcare.gov) notifies applicants about Medicaid's right to pursue and recover any money from other health insurance, legal settlements or other third parties but does not disclose estate recovery. Since estate recovery is one of the terms of the Medicaid contract, it is deceptive to omit disclosure of this practice. CMS was asked to provide the reasons for this omission.
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