Medicaid Expansion Could Cost Some Lower-income Families
NEW YORK ( MainStreet) Too often things have a way of not working out for lower income individuals, and that may be the case for some heirs under Obamacare. While some individuals and families may not have to pay the premiums at all for health insurance, lower-income families that qualify for Medicaid under the expansion could have to reimburse the government for benefits paid out.
Medicaid expansion was created under the Affordable Care Act to fill the gap between those Americans whose income is too low to qualify for tax credits to be able to afford private health insurance sold through the government healthcare Marketplace but too high to qualify for Medicaid. The expansion provides health care coverage to these Americans by raising the Medicaid income cap to include families that make less than 138% of the federal poverty level (about $32,500 for a family of four, according to healthcare.gov).
As of December 2013, 26 states are moving forward with Medicaid expansion in 2014, with a handful of states moving forward sometime after that.
But unlike having private health insurance sold through the marketplace, Medicaid, in some circumstances and in some states is a loan, rather than insurance. According to Medicaid.gov: "State Medicaid programs must recover certain Medicaid benefits paid on behalf of a Medicaid enrollee." That includes collecting reimbursement from estates for long-term care services and related hospital and prescription drug services. States may even impose property liens for Medicaid benefits for institutionalized beneficiaries but must remove the lien when the Medicaid enrollee is discharged and returns home. (There are exceptions to these rules when the beneficiary has a spouse, a child under the age of 21 years, or a blind or disabled child.) States may recover for any payouts if the person dies, regardless of age, if it was in their rules before the Medicaid expansion, says attorney Virginia Gleason, a consultant at Soyring Consulting.
Of course, in order to take advantage of Medicaid, you must qualify. People who have "delayed their Social Security benefits, because they were advised to by their financial professional, may find it difficult to qualify for Medicaid later in life, since they will most likely have too much income from Social Security to qualify for Medicaid," says Dan McGrath, director of healthcare funding strategies at Jester Financial, a Medicare consulting firm.
Those who do qualify and who sign up for Medicaid at Healthcare.gov, may have a leg up. The application for Medicaid under the expansion at the federal government marketplace website does not ask about the assets as do state applications, Gleason says. Therefore, it is unclear if people who sign up at Healthcare.gov will be subject to the same five-year look-back period, she says.