The 117th Congress should end Medicaid Estate Recovery for the ACA Medicaid expansion population

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n.b. 4/7/21: see update from 2021 MACPAC report at bottom

Democrats have big plans on the healthcare front, only some of which they're likely to push through Congress with a threadbare Senate majority. Look for some sweetening of ACA marketplace subsidies and meaningful action to contain prescription drug prices. 

First, though, some housekeeping. The first healthcare bill advanced in the 117th Congress will likely render moot Texas v. California,  the suit now before the Supreme Court seeking to have the ACA declared unconstitutional. A single sentence, either restoring an individual mandate penalty of $1 or repealing the mandate and declaring in severable from the rest of the ACA, should suffice.

For their second act, Democrats should take up a bill introduced just last month by Rep. Steve King (R). Yes, that Steve King, ex of Iowa's 4th District, the notorious racist who was defeated in a primary last June and is no longer in the House.

ACA Medicaid expansion: Lien on me?

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N.B. 6/19: See second update at bottom: there is a bill in the New Jersey legislature, S3489/A5064, that would ended the pursuit of asset recovery for Medicaid enrollees who are not enrolled in long-term care.

I think it's fairly widely understood (at least by me) that Medicaid picks up the tab for long-term care only when the beneficiary has spent down her assets (if she had any), and that when the spouse of such a beneficiary passes the state can claim remaining assets, such as a house.

What I didn't know, and just learned via  New Jersey-based elder lawyer Lauren Marinaro, is that most states can recover assets from any Medicaid recipient over age 55 upon that person's death or the death of his spouse (or any children passing age 21 or blind or disabled). In most states, that's true whether or not the Medicaid enrollee obtained long-term care.

A 1993 federal law required states to recover assets from the estates of recipients of long-term care services under Medicaid. States also have the option of recovering for other Medicaid benefits obtained above age 55. As of 2014, 35 states and D.C. were recovering for other benefits.

The ACA Medicaid expansion complicated the picture. Pre-ACA, Medicaid eligibility generally included an asset test -- as it still does for Aged, Blind and Disabled (ABD) Medicaid. In states that have accepted the ACA expansion, however, Medicaid eligibility is extended to anyone* whose household income is below 139% of the Federal Poverty Level (FPL) -- or $17,236 for a single person in 2019.

There is no asset test for Medicaid eligibility under ACA expansion criteria.  But in many states (including New Jersey) anyone over age 55 who qualifies as an "expansion" enrollee (as well as any other Medicaid enrollee) is potentially subject to lien on assets and state recovery after death. In New Jersey, the tab would include total capitated premium paid to a Medicaid managed care organization (MCO) for enrollment in a managed Medicaid health plan. (A 2017 update to NJ asset recovery rules is here.)