Assortment brokers for the state of Iowa have despatched letters searching for tens of millions of {dollars} from the estates of at the least two individuals with disabilities who died after spending most of their lives in a state establishment.
The quantities signify what Medicaid spent overlaying the residents’ care once they lived on the Glenwood Useful resource Heart, a state-run facility that closed final summer season.
The payments are extraordinary examples of a observe known as Medicaid estate recovery. Federal legislation requires states to attempt to accumulate cash after some sorts of Medicaid recipients die. The purpose is to encourage individuals to make use of their very own assets earlier than counting on the general public program. However some states, together with Iowa, are significantly aggressive concerning the collections, national reports show.
Pleasure Higgins was shocked by a letter she acquired a number of weeks after her 41-year-old daughter, Kristin, died final Might. The letter was written on Iowa Division of Well being and Human Companies stationery. On the high, in daring letters, it mentioned, “Re: Kristin Higgins.”
“Pricey Pleasure Higgins,” the letter learn. “Our honest condolences to you, as we perceive the above particular person is deceased.”
The letter defined that any cash Kristin Higgins left behind must be remitted to the state to assist repay Medicaid $4,263,148.67. Her household had 30 days to reply.
Pleasure Higgins, who lives in Council Bluffs, wonders why state debt collectors would ship a large invoice to the household of somebody like her daughter, who had little earnings due to a extreme developmental incapacity stemming from a untimely beginning.
“What are they gaining? That’s my query. Apart from kicking somebody within the face proper after they misplaced a cherished one?” Higgins mentioned.
Kristin Higgins’ solely earnings was a Social Safety incapacity good thing about $1,105 month-to-month. Most of that went on to the state establishment, the place she lived for greater than 30 years. Simply $50 was put aside month-to-month as an allowance for private bills, in accordance with a state ledger obtained by her household. “They knew precisely how a lot she had,” her mom mentioned.
When she died, Kristin’s private account had a steadiness of $2,239.84. The household put that cash towards her funeral, an allowed expense. Nothing was left for the state to take. Higgins mentioned receiving the letter was traumatic though the household didn’t need to pay the Medicaid invoice.
The Higginses have heard about comparable makes an attempt to gather from different households, together with that of Eric Tomlyn, who died in 2020 at age 29 after spending most of his life on the Glenwood Useful resource Heart.
Shortly after his loss of life, the Tomlyn household acquired a Medicaid invoice of greater than $4.2 million. His mom, Susan Tomlyn, was shocked by the letter. “I used to be like, ‘What? What? Oh my God,’” she recalled.
She stuffed out a kind explaining that the small steadiness in her son’s private account had gone towards his funeral. “That’s the final I heard of it,” Tomlyn mentioned.
Supporters of estate recovery efforts say the foundations encourage individuals to pay for their very own care earlier than making use of for Medicaid, which is especially supposed to assist these with little cash.
Critics of property restoration packages say they usually goal households with little to offer. Wealthier households are inclined to have attorneys who can construction estates in ways in which keep away from Medicaid reimbursement calls for, the critics word.
Like Higgins, Tomlyn thought her Medicaid restoration invoice got here from state officers as a result of it was printed on letterhead from the Iowa Division of Well being and Human Companies. The individuals who signed the letters recognized themselves as being from the “Property Restoration Program.” However the individuals who produce such letters work for personal contractors employed to gather Medicaid money owed, in accordance with Alex Murphy, a spokesperson for the state company. Their contract requires them to make use of state stationery.
Murphy mentioned in an e-mail to KFF Well being Information that such letters are despatched after each loss of life of an Iowa Medicaid recipient who was at the least 55 years previous or who lived in a long-term care facility. He mentioned the letters “request data from members of the family relating to the deceased particular person’s belongings and bills,” and the letters word that repayments are anticipated solely from the particular person’s property.
Iowa’s Medicaid collections are dealt with by Sumo Group, a Des Moines firm. Its director, Ben Chatman, declined to reply questions, together with why the corporate despatched payments to households of individuals with disabilities who lived most of their lives in state establishments. “I don’t do media relations,” Chatman mentioned.
Sumo Group is a subcontractor of a nationwide firm, Gainwell Applied sciences, which has dealt with Medicaid collections for a number of states. In Iowa, the corporate is paid 11% of no matter it may accumulate from the estates of Medicaid individuals. A spokesperson for Gainwell declined to remark.
Iowa’s Medicaid property restoration program introduced in $40.2 million within the fiscal yr that ended final June, up practically 14% from two years earlier, state data present. That whole represents a sliver of the state’s whole Medicaid finances, which is predicted to hit $9 billion this yr.
Practically two-thirds of Iowa property restoration circumstances wound up being closed with no assortment of cash final fiscal yr, in accordance with the state. In circumstances wherein cash was recouped, the common quantity paid was about $10,000.
Thirty-five Iowa households have been granted hardship waivers, which the state permits if an inheritor’s well being or life could be endangered as a result of cost of the Medicaid invoice would deprive them of meals, clothes, shelter, or medical care. Officers denied an extra 20 requests for hardship waivers.
A 2021 report to Congress estimated states collected greater than $700 million yearly from Medicaid individuals’ estates. That cash is shared with the federal authorities, which helps finance Medicaid. Some states claw again a lot lower than others. Hawaii, for instance, collected simply $31,000 in 2019, the newest yr analyzed within the federal report. Iowa, with about twice as many residents as Hawaii, raked again greater than $26 million that yr.
Individuals aren’t topic to such clawbacks for utilizing every other federal well being program, together with Medicare, which covers older individuals of all earnings ranges.
The nationwide group Justice in Growing older has helped lead opposition to Medicaid property restoration packages. Eric Carlson, a California lawyer for the group, mentioned the difficulty often comes into play after the loss of life of an individual who had nursing dwelling care coated by Medicaid. Restoration calls for usually drive survivors to promote properties which are their households’ essential type of wealth, he mentioned.
Carlson mentioned he hadn’t beforehand heard of Medicaid property restoration payments topping $4 million, like those despatched to survivors of the 2 Iowans with disabilities.
He questioned why debt collectors would pursue such circumstances, that are unlikely to yield any cash however might trigger anxiousness for households. “After all, in case you open up a bit of mail that claims you owe tens of millions of {dollars}, you’re going to assume the worst,” he mentioned.
Carlson mentioned he would advise anybody who receives such a letter to answer it with documentation exhibiting that their cherished one’s property can’t repay a Medicaid debt. “It’s by no means a good suggestion to disregard it,” he mentioned. Failure to answer the invoice might result in continued assortment efforts, which might threaten a member of the family’s funds or property, he mentioned.
Some states have reined of their Medicaid clawback efforts. For instance, Massachusetts legislators final yr voted to drastically limit their program. This was the second time Massachusetts decreased its Medicaid property restoration effort, which as soon as was one of the aggressive within the U.S.
Critics in Congress have additionally tried to restrict the observe.
Rep. Jan Schakowsky (D-Unwell.) has twice launched payments to eradicate the federal requirement that states claw again Medicaid spending from recipients’ estates. Last year’s bill gained 47 Democratic co-sponsors, however it acquired no help from the Republicans controlling the chamber, and there was no comparable invoice within the Senate. She plans to attempt once more this yr, though her get together stays within the minority.
Schakowsky mentioned in an interview that she’d by no means heard of Medicaid property restoration calls for reaching tens of millions of {dollars}, because the Iowa households confronted. However calls for for lots of of 1000’s of {dollars} are frequent. For a lot of households, “that’s nonetheless unimaginable” to fulfill, she mentioned.
Schakowsky hopes that members of Congress from each events will comply with curtail this system as soon as they understand how a lot angst it causes their constituents and the way comparatively little cash it returns to the federal government. “The entire program is ridiculous,” she mentioned.
Her quest might develop into even more durable if the Trump administration strikes forward with proposals to trim Medicaid spending.
The workplace of Sen. Chuck Grassley, who’s the senior member of Iowa’s all-Republican congressional delegation and has taken main roles in lots of well being coverage debates, declined to touch upon the difficulty.
The Iowa Division of Well being and Human Companies mentioned it notifies households concerning the property restoration course of once they apply for Medicaid. Pleasure Higgins mentioned she doesn’t recall seeing such a discover.
The establishment the place Kristin Higgins spent most of her life was closed last year after federal officers investigated complaints of poor medical care. However Pleasure Higgins mentioned her daughter was handled nicely there total. “If I had tens of millions within the financial institution, I’d give it to the state,” she mentioned. “I might. It was value it.”
Has your loved ones been despatched payments for reimbursement of Medicaid bills after the loss of life of a cherished one who was coated by this system? Click here to inform KFF Well being Information your story.
