Monday, May 09, 2022

John Roberts, James Joyce, the individual mandate, Medicaid Estate Recovery, and "affordable" care

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A good book about Ireland's history since 1958, Fintan O'Toole's We Don't Know Ourselves: A Personal History of Modern Ireland led me to a second attempt at James Joyce's Ulysses, which I stalled out on decades ago, somewhere after Leopold Bloom emerges from an outhouse. Further I plod. One thing I will say for Joyce's internal babble is it does make you somewhat more mindful -- inclined to track your own perceptions and fleeting thoughts. 

So it was that I caught one lightning round of associations at lunchtime today:

--  John Roberts -- trying to moderate Roe strike-down?

-- Roberts -- headed off one radical conservative decision by saving the ACA's individual mandate "as a tax." 

-- The mandate -- justifiable? -- if insurance were truly affordable for all, but under the ACA as written, it wasn't.*

-- RBG: mocking Scalia's broccoli horrible -- mandates to buy all kinds of stuff...

-- mandating that people buy private insurance -- ok?

-- not always private -- the mandate could land you in Medicaid. Public! Free!

-- But... Medicaid Estate Recovery!  -- for applicants over age 55 in 20-plus states, the mandated coverage is a long-term loan... 

And there I was brought up short by an actual thought. I have written before -- several times -- that Medicaid Estate Recovery imposed on Medicaid enrollees who are not in long-term care undermines the ACA's promise of "affordable" care -- and the mandate to obtain it. But what struck me, as I'm about to enter the marketplace myself -- is that no one is threatening to come after my estate for the gargantuan subsidy my wife and I are eligible for. Medicaid is cheaper than marketplace coverage, but in 20-plus states, people over 55 who access it (or rather, their heirs) are ultimately on the hook for all premiums fronted by the government. In New Jersey, an adult made eligible for Medicaid by the ACA cost the state and federal government $416 per month (in 2019). My wife and I will cost the feds $700/month or so. We get the benefit free and clear; the Medicaid enrollee's children may have to pay the state back after the enrollee's death.

Put another way, if you're over age 55, lack access to other insurance and earn $17,775 per year, under the ARPA subsidy schedule you qualify free silver marketplace coverage with Cost Sharing Reduction that bumps the actuarial value to 94%. If you earn, $17,773, you get Medicaid -- also free, but with an effective lien on it.

That's ridiculous. One generation's legislative priority was to avoid giving people with assets free long-term care (though estate recovery most commonly falls on low income people). So the 1993 omnibus budget package required states to recover from the estates of those whose long-term care was funded by Medicaid. That 3rd Way legislative aim ran smack dab into the next generation's intent: to make affordable health coverage available to all non-seniors. States, given the option to extend Medicaid Estate Recovery to all enrollees over age 55, most often opted for the extra revenue opportunity.  Thus, "affordable" coverage is a long-term loan for a significant subset of near-elderly beneficiaries of the ACA Medicaid expansion, or other pathways to Medicaid eligibility.

Okay, it's not a new thought. It's the same obvious injustice. But the stark contrast with the way marketplace coverage -- more wasteful, more expensive, available only at higher incomes -- is granted struck me afresh.


* I somehow skirted the usual follow-on thought: the ARPA subsidy boosts brought the ACA a lot closer to living up to its name, and it will be  policy disaster and political suicide if Democrats fail to extend them.

Photo by Skitterphoto:


  1. Your: "Okay, it's not a new thought. It's the same obvious injustice. But the stark contrast with the way marketplace coverage -- more wasteful, more expensive, available only at higher incomes -- is granted struck me afresh."

    It is grossly inappropriate to even consider apologizing on publicizing this matter because it is not a new thought of yours. (Your link above to your NJ advocacy article, as well as:
    and .)

    Because the issue is so unpublicized, and is such an obvious injustice (by comparison to Medicaid/ expanded Medicaid 55+ in those states to on-exchange subsidized people), and is an obvious failure for the ACA to satisfy its goal of making affordable health insurance available to all. (Real insurance like the rest of the developed countries have--not "a loan until death for medical expenses", which the estate recovery can be.)

    The NY Times seems to have never mentioned this issue.

    The Washington Post, only once, in 2014:

    and the distinguished Health Affairs "Following the ACA blog" only once, also in 2014:

    It is completely flagrant and bizarre press failure that you are the only health journalist, and virtually the only journalist at all, with the clarity of thought and sense and decency over partisan-ness to point the issue out as one of the current 5 or so ACA flaws.

    For the exact reasons that you have cited, the estate recovery on non-long-term-care is bizarre, cruel, and crazy, and yet the press in recent years refuses to say a thing.

    How much is lack of clear thinking on the part of reporters and editors I do not know. But the issue is so flagrant that it brings to the forefront the idea that the mainstream media, including the NY Times and Washington Post, are more than anything organs of mass manipulation and protection of special interests and political groups--much more that than organs of getting us to the truth.

    (Think "Manufacturing Consent" as by Chomsky, or the original quote taken from LIppmann, or think also of "Propaganda" by Bernays.)

    Anyway, for those looking for some of the history of the issue -- the estate recovery of non-long-term-care Medicaids was recognized by certain states as a problem at around the ACA main-provisions start in 2014, and in fact a number of Democratic states which had been doing the recovery pre-ACA, applicable to non-long-term-care-Medicaids pre-2014, and to those same Medicaids as well as the fundamental ACA part called "expanded Medicaid" post-ACA, did stop that recovery. These states include NY, OR, WA, MN, CO, CA, and CT. However, certain states, including, conspicuously, some Democratic ones, such as NJ, MA, and MD, continue that estate recovery.

    Those interested in details on that history can consult:

    (verifying the assertions from the links) or its backup here: .

    (Full disclosure: I wrote most of that Wikipedia article myself in 2019 after being shocked to find out that, post ACA, ordinary non-long-term-care Medical coverage, including from the specific ACA part called "expanded Medicaid" was being estate recovered.)

    Thanks again, Andrew, for being the only guy bringing up the issue!

  2. Above comment was by me, Norm Spier (you didn't have to guess, did you?).

    (My name was missing because of an entry error, where I didn't see that the http:// part is now Required on the URL by the new software to take your name and URL.)

  3. Based on a quick internet search, Medicaid spent about $135 billion on long term care benefits in 2020.

    The total amount recovered, one brutal case at a time, was about $719 million.

    If this doesn't scream "Why bother?", I guess that nothing will.

    1. Hi Bob,

      1)Long-term-care Medicaids:

      In case you don't know of it, there was a MACPAC report of 2021, which made the recommendation to stop mandating the states to do any estate recovery. (The states still keep the option to do it where they have it now.)

      This recommendation is in the report here:

      right at the first page, top item 3.1.

      The report also has some recovery and Medicaid expense numbers on long-term-care, echoing your point that recovery is basically minimal. However, if you drill down by state, states which are very aggressive at recovery, like Iowa, may do better than average, recovering as much as 15%. (You can see that from the table on adobe p. 48, but be cautious that the high 15% recovery may overstate the recovery proportion since the LTC expense amount is restricted to fee-for-service. If most expenses in Iowa are by capitation, the 15% number may vastly overstate the recovered proportion, and could even be meaningless.)

      BTW, there is a bill in the House ( ) to repeal the requirement that the states estate recover long-term-care, in line with the MACPAC recommendation. Of course, a bill existing means nothing, and someone I know indicated his research indicated the bill was considered to have about a 1% chance of passing.

      2)Non-long-term care Medicaids:

      Note that the focus of Andrew's post is the estate recovery of non-long-term-care Medicaids, including ACA expanded Medicaid, and not long-term-care Medicaids

      .(States are not obligated under current Federal law to estate recover any non-long-term-care Medicaids, but about 20 still do. They recover it for people 55 or older when they had the Medicaid, which is the only option granted Federally. They can't recover it for people who were below 55 when they had the Medicaid.)

      Besides the flagrant gross unfairness of this (in states where the recovery on non-long-term-care Medicaids, such as ACA expanded Medicaid, is done, people get free or highly subsidized real ACA on-exchange insurance if their income is above 138% of Fed. Pov. Lvl., but if they drop below, even briefly, they get a loan until death--either a loan until death for a capitation, or a loan until death for whatever medical expenses occur, no matter how high).

      Avoiding putting words into Andrew's mouth (thus my view), another reason the estate recovery on non-long-term-care Medicaids and ACA expanded Medicaid is problematic is that with the ACA main provisions going into effect in 2014, the country is supposed to have handled the ordinary (non-long-term-care) medical insurance problem like the rest of the developed world has. But it has not, due to that loan-only "insurance" (as well as about 5 other problems--subject of other posts of Andrew's, and, in some cases, Democratic repairs and attempted repairs--BBB obstruction obstructing some repairs not withstanding.)

      Now, long-term-care: the country has attempted no national long term care insurance program. (Germany has such a program, for instance, funded by a payroll tax of about 3%. I believe many Scandinavian countries also have such, though some developed countries have no such program.)

      Thus, the U.S. has left long-term-care insurance for all as a problem for another day. But for non-long-term-care, we have more-or-less announced that it is solved with the Affordable Care Act, and many people think it so. I (and I suspect Andrew as well) is trying to have us fix what have announced and thought we solved, but messed up.

  4. Adding another aspect that makes the estate recovery of expanded Medicaid even more crazy from the state's financial perspective: the proportion of money estate recovered by the state corresponding to Federal Medicaid matching funds has to be returned to the Federal government.

    (I had heard this from someone a long while back, but not being able to verify from a reliable source, I had restrained from treating it as a fact in the argument.

    However, I just found it in a reliable source, HHS, here:

    "A state's estate recovery program might also be influenced by how much of the total amount recovered represents federal match and, therefore, must be returned to the Federal Government.")

    So, since 90% of expanded Medicaid is paid for by the Federal government, 90% of revenues collected from that recovery go back to the Federal government and are not kept by the state, so the recovery causes a net outflow of 90% from the state.

    Only slightly less compellingly, 50% and often more of ordinary pre-ACA-existing (non-expanded Medicaid) is paid for by the Feds, so there is still a net outflow. And, for traditional, pre-ACA existing Medicaids, the people receiving it generally have be dirt poor in both assets and income: there should be not much available to recover from those people.