Have you ever wondered about warning labels? I mean, some of them are so ridiculous that you have to wonder who the person was that created the need for such a ridiculous warning label.

For example, the warning label on the sleep-aid Nytol warns, “May cause drowsiness.” I hope so!

This weekend my husband and I let friends borrow our chainsaw.  The warning on the chainsaw says, “Do not hold on wrong side of chainsaw.”  Really? What moronic person would grab a chainsaw by the saw blade?  But the warning is there, so there must have been at least one person who held the chainsaw by the saw blade, turned on the saw and…you know.

Then comes my personal favorite…my egg carton from the grocery store states, “This product may contain eggs.” My egg carton!  Really?

Medicaid cards should come with warning labels.  Multiple warning labels.  Such as:

“Warning: You may not be able to find a physician willing to accept Medicaid.”

Or

“Warning:  This may not be your card. Review the name prior to use.”

Or

“Warning:  This card could lead to you losing your home.”

What?

For most people, your home is your biggest investment in your lifetime.  Many people want to pass their houses down to children, or, at least, give the children the right to sell the home and keep the money.  To some, the home is the biggest inheritance…maybe the only inheritance.

So how can NC take your home if you are on Medicaid?

According to NC Department of Health and Human Services (DHHS), the estates of Medicaid recipients may be subject to estate recovery if (1) The Medicaid recipient applied on or after October 1, 1994.  (Considering it is 2014, I would guess that most people fall into this category); and one of the following:

(a) is under age 55 and an inpatient in a nursing facility, intermediate care facility for the intellectual developmentally disabled, or other medical institution, and cannot reasonably be discharged to return home; or

(b) is 55 years of age or older and is living in medical facility and receiving medical care services, or home and community-based services, or In Home Care Services (IHC). 

Also, In Home Care Services (IHC) claims for SA recipients ages 55 and over are subject to Medicaid Estate Recovery.

This estate recovery is not new.  Recently, I have seen a few articles on the internet that state that this estate recovery is a new addition to the Affordable Care Act (ACA).  This is incorrect information.  In 1965, estate recovery was optional and states could only recoup Medicaid costs spent on those 65 years or older.  In 1993, Congress passed a budget bill that required states to recover the expense of long-term care and related costs for deceased Medicaid recipients 55 or older. The 1993 federal law also gave states the option to recover all other Medicaid expenses.  The only change that the ACA made to the estate recovery rule is, by expanding Medicaid, providing more estates to be recovered.

“Warning: Medicaid can take your home!”

The estate recovery oddly seems to disproportionately affect people over 55 years of age.

DHHS does state that it will NOT seek a lien on your property while you are alive.  DHHS only seeks the estate recovery after your death.  DHHS also states that estate recovery is waived in some circumstances.  What circumstances are those? And why wouldn’t those circumstances apply to everyone?

What exactly can the state seek to recover?

“At a minimum, states must recover amounts spent by Medicaid for long-term care and related drug and hospital benefits, including Medicaid payments for Medicare cost sharing related to these services. However, they have the option of recovering the costs of all Medicaid services paid on the recipient’s behalf. The majority of states recover spending for more than the minimum of long-term care and related expenses.”  (emphasis added).  See HHS’s website.

Isn’t Medicaid intended to be free health care for low-income and needy people? If the state can recover from a person’s estate after death, did that person really receive free health care? Or was the health care merely a loan?

Warning on the Medicaid card: “Warning! By accepting Medicaid, you are authorizing the state to recover from your estate, and, in some circumstances, your home.” 

But the warning is very tiny print.