Tuesday, July 15, 2008

Ruling in Minnesota can complicate family liability for Medicaid expenses; federal law seems self-contradictory

The Center of the American Experience is a conservative group in Minneapolis. When I lived there, I did attend some of the luncheons and events and heard (libertarian oriented) John Stossel speak there.

Today the Center published and disseminated an essay by Peter J. Nelson, “Housing assets should help finance long-term care,” link here. Mr. Nelson also has an entry on the State Policy Blog here.

The essay refers to a case where the state Supreme Court of Minnesota held that federal law precludes the state Medicaid program from recovering money from the estate of a deceased husband to pay for a wife’s long term care. The case involves one Frances E. Barg, and the court opinion, issued May 30, 2008, is available (PDF) here. As of now, the ruling would only be binding on Minnesota.

The irony is that look-back provisions in federal law require states to try to recover money that has been “given away” to other relatives. The situation is somewhat confusing.

Because Medicaid is precluded on “asset spend down” sometimes recipients engage in complex strategies to make assets “unavailable” (including masking them as "homestead").

Mr. Nelson is arguing that government should be even stricter about going after existing assets to pay for state Medicaid nursing home expenses, in order to limit the passing of the costs on to needier recipients.

Even so, in many states (I don’t believe Minnesota is one of them), states can require adult children to support (including paying nursing home bills) of indigent parents, even though these laws so far are rarely enforced. Changing demographics, depressed state budgets, and even international attention to filial responsibility in other countries (especially China) could cause this to change.

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