The Horrors of Estate Recovery

New Orleans    The horrors visited on low-and-moderate income families are numerous and their damage inestimable and often devastating now and onward to future generations.  Even knowing this, it is still shocking to find additional examples hidden right before our eyes.

A case in point is estate recovery.  The Medicaid Estate Recovery Program in its present form is a legacy of the Clinton Administration.  Prior to 1993, estate recovery for repayment of Medicaid debts was voluntary, but President Bill Clinton signed the bill that year making it mandatory as a part and parcel of his deficit-reduction act and the false rhetoric of changing “welfare as we know it” and the mythical hype of personal responsibility as an antidote for poverty.  Much of the recovery was linked to the aging boomer population and the soaring costs of long-term care in nursing homes.

Medicaid, remember is not Medicare.  Medicare is available for those individuals over the age of sixty-five.  Medicaid is for the very poor.  Since the expansion of Medicaid through Obamacare, the Affordable Care Act, many understand how critical the program is for both the poor and lower waged workers.   In short, let there be no doubts on this score, this was a program deliberately designed and made obligatory in order to punish the poor by trying to raid whatever small estates that they might have when they die in order to impoverish their relatives as well as the deceased.

According to an article in the October issue of The Atlantic, the full level of the mean-spiritedness of this program is revealed, contrary to former Speaker Newt Gingrich and the Clintonista myth of the poor’s irresponsibility, in the almost infinitesimal level of recovery involved relative to the total cost of the Medicaid program or the long=term care program and its cost recovery, and the disproportionate horror it brings to the families trying to pay the bills.  As the story is reported in The Atlantic,

“…the overwhelming majority of estates are not worth hundreds of thousands of dollars.  In 2005, the Public Policy Institute of the AARP published a study of the first decade of mandatory estate recovery, Massachusetts, it found, recovered of $16,442 per estate in 2003,…offsetting a little more than 1 percent of long-term-care costs that year….In Kentucky…the average amount collected from an state was $93; the state recovered just 0.25 percent of its long-term-care costs.  The total amount states recouped jumped from $72 million in 1996 to $347 million seven years later – but even so, estate recoveries accounted for less than 1 percent of Medicaid’s total nursing-home costs in 2003.”

If it’s not just to hurt the poor and their hapless heirs, what’s the real point of this program?   It probably cost more cumulatively for states to administer the recovery program, than they are able to recover!

The Atlantic detailed one story after another of lower income families losing their homes or farms or their folks’ couple of acres and heirlooms passed on through the generations because of this predatory recovery.  The irony of the same program paying hundreds of thousands of dollars for operations and expecting no recovery compared to nursing home care is obvious.  The outrage that allows wealthy families to shield millions from taxation to bequeath to their heirs, while the poor are forced to become poorer and leave their own poverty as their inheritance to their children is equally obvious.

What excuse can there be for such a horror?

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Readmission Guidelines are Not Without Risk

New Orleans       I’ll admit it.  I’m looking for silver lining in the clouds.  In the midst of the Trump administration’s unraveling of critical labor, environmental, health, safety, and welfare standards to see the FDA continue to crack down on e-cigarettes or HHS continue to hold nursing homes more accountable for care must count as patches of sunlight on dark days.

Of course, touting the readmission penalties imposed on hospitals and now extended to nursing homes with financial penalties seemed like a win all the way in increased accountability and lower costs.  It pains me to be “Debbie Downer” on my own parade here, but there are some big caveats and question marks that are also emerging about these readmission penalties being sounded by cardiologists.  An op-ed in the Times by several of them pointed out some of the risks that are now emerging, partially because of the way hospitals are gaming the rule.

The rule emerged when Medicare officials and researchers realized a decade ago that 20% of Medicare patients hospitalized for fairly common occurrences were being readmitted to the institutions within 30 days with about half of those readmissions coming from causes thought to be preventable.  Implementing the penalties for quick readmissions on a half-dozen different medical ailments saved Medicare about $10 billion a year.

The researchers have now found that hospitals are hustling the rule in order to avoid the penalty, which is a reduction of their Medicare reimbursement rate, by caring for comebacks in the emergency room to avoid readmitting, even if they really belong in a hospital bed. Furthermore, hospitals serving lower income patients with more health issues are also being penalized because they have higher readmission rates.  Those are my people, which is why this piece got my attention!  Worse, they claim that death rates now seem to be rising for pneumonia and some heart cases, even as the penalties are saving money.

These are big-time researchers from Harvard Medical School, Washington University School of Medicine, and Beth Israel Deaconess Medical Center in Boston so they are cautious even as they raise red flags about the rule.  Their concern is prompted by a “save money at all cost” caucus in Washington that wants to extend the six health reasons that can trigger readmission penalties to all Medicare patients for all reasons.

The doctors want an investigation by Centers for Medicare and Medicaid Services before expanding the rule in order to make sure that unintended consequences aren’t killing people. I’m not saying their position will prevail, but I find it hard to argue against looking harder before we leap farther in this direction.  Poor people are dying too fast already.  There’s no reason to kill any more of our people off before their time, even as we hold money-grubbing health institutions accountable.  This shouldn’t be a tradeoff.

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