You may not know it, but if you’re on the Oregon Health Plan your estate could be billed for some of your medical costs after you die. In an effort to boost the number of people who get Oregon’s version of Medicaid, the state has changed its repayment rules.
Kim Hawkins turns 60 this year. She has a little yellow house close to downtown Lake Oswego and says she lives a simple life. “I started out in banking when I was young. And then I did probate and estate planning as a paralegal for years,” Hawkins says. “And then I found out what soil is and I got overexcited about gardening and became a master gardener.”
But the last five years have not been kind to Hawkins. She suffers from chronic back pain and says she hasn’t been able to garden or get a job.
“It takes my energy and it’s all I can do to keep this little house going on the inside. I pretty much have let go of a lot of things on the exterior of the home,” she says.
Hawkins doesn’t have health insurance. But in October, she got a letter from the state saying she could enroll in the Oregon Health Plan. Her interest was piqued, but she balked when she read that the Oregon Health Authority could recoup money from enrollees who are 55 or older, after they die.
“Most children of parents who are on Medicaid are wholly unaware that their folks’ premiums and their prescription drugs and their out of pocket co-pays that are paid by the Oregon Health Plan are recovered at death,” Hawkins said.
She’d like to leave some money to charities and family members when she dies. So, she called to find out how much the state might want to recover.
“The gal at the estates unit was unable to address costs with me and for that reason I just said, ‘I don’t think this is what I want to pursue. It’s not how I handle my finances.’ I don’t mind having an insurance plan, but I like to know what I’m getting and for how much,” Hawkins said.
Hawkins wasn’t the only person who had questions and concerns. The director of medical assistance programs with the Oregon Health Authority, Judy Mohr-Peterson, said that in the run-up to the opening of health care enrollment in October, lots of people were asking about estate recovery.
“And it was proving to be a barrier for people to sign up for coverage,” Mohr-Peterson said. “Given the fact that this is a new world where health insurance should be available to everyone, and we want everyone to be covered, we didn’t want those barriers to be in place.”
So the state changed its estate recovery rule.
The rule “only applies now if you are in that situation of receiving long-term care supports and services,” Mohr-Peterson said.
So the state will only come after your assets if it has been paying for your long-term care—for example, if you’ve been living a nursing home. A year in an Oregon nursing home can cost as much as $90,000.
Mohr-Peterson says the charges to an individual’s estate are calculated by figuring out how many days a person lived in the nursing facility, and then multiplying by a daily cost figure.
The removal of the estate recovery clause is good news for low-income people who want health insurance and are worried about whether they could pass on a major asset, like a home, to their children.
But what about the state? Mohr-Peterson estimates the change will cost the state about $700,000 over the next 18 months.
“It’s not insignificant, but when we’re weighing it against the total amount of estate recovery, we believed that it was more important that people get coverage and it was going to play out as far as reducing health care costs in other settings because people will now have health insurance and won’t see the estate recovery as a barrier,” Mohr Peterson said.
Does Kim Hawkins think it’s still a barrier? She’s trying to understand the change. She realized that a second letter she received from the state about the Oregon Health Plan was slightly different from the first, when she reviewed to the estate recovery clause.
“The attachment to that letter did not say anything about pulling out the clause or amending the clause that was in the previous letter,” Hawkins said. “But it did have a separate clause and it didn’t have that clause in it. So it would be completely confusing to someone who would now be reading the follow up letter from the Oregon Health Authority.”
Other people might find that confusing, she says. But will she now sign up for the Oregon Health Plan?
“If you know that if you’re out and you get hit by a car or something, that you’ve got some way of mending your body that otherwise you may not have, anyone on the planet would say they would appreciate that,” Hawkins said.
But is that enough to convince her to jump into the health plan?
“No,” she said. “I still have some questions.”
Over the last two years, the state attempted to recover money from about 16,000 people under the old system. It was successful slightly more than half the time, but the effort brought in millions of dollars.