Is your personal estate safe from a state lien upon your demise? The answer may be more complicated than you think.
Thousands of Minnesota residents between 55 and 65 were unwittingly routed to the Department of Human Service’s (DHS) Medical Assistance (MA) program when signing up for health insurance on the MNsure website. Once on the MA program, DHS placed a claim against an enrollee’s estate to recover health insurance premiums or medical costs paid by the state on their behalf. Claims turn into liens upon the enrollee’s demise.
Rick and Rose Rayburn were among the enrollees who discovered DHS was holding a $30,000 claim on their personal estate. Willow River residents Scott and Ellen Killerud found themselves in a similar situation with an $11,000 claim on their farm. Robert and Julie Gelle, retirees from Sandstone, and Claudia Foussard, a hairdresser from St. Paul, were also affected.
Over the course of several months, this core group of people formed an informal, but effective grass roots coalition to fight their shared injustice.
Sen. Tony Lourey (DFL) responded to the group’s outcry by authoring a bill, subject to federal approval, ending claims placed on estates to recover general health care costs paid by the state on behalf of MA recipients between 55-65. On June 1, Gov. Mark Dayton signed the bill into law, retroactive to January 1, 2014.
While Rayburn and other members of the grass roots coalition celebrated the law’s signing, they cautiously await federal approval.
On November 14, the federal agency, Centers for Medicare and Medicaid Services (CMS) sent a request for additional information to DHS regarding its State Plan Amendment (SPA). The letter states in part, “CMS has concerns with state’s proposal to apply the proposed recovery revisions retroactively back to January 1, 2014. In order to consider this SPA for approval, the state must submit a revised SPA removing the January 1, 2014 date from the SPA.”
Rick Rayburn learned about the communication between CMS and DHS in the last hour of the last day of the 90-day period allotted for a response from the federal agency to the state. The news raised a red flag for him.
“When the law passed, we were told this was a done deal,” said Rayburn. “All it needed was federal approval from CMS. We thought we got the law changed. We thought justice was served. Now this.”
Since learning of CMS’s response, Rayburn has rallied the coalition. Friday, December 2, Rayburn and St. Paul resident Claudia Foussard met with a news team from KARE 11 television station to get the word out.
“Nothing’s changed,” Foussard told KARE 11 reporter Jay Olstad. “I feel like Minnesota is very sneaky. I don’t think the state is doing what they say they are doing.” Julie Gelle, a member of the coalition, also feels misled.
“We are basically back to square one because of all the continued confusion between DHS and CMS wanting more information,” said Gelle.
While Sen. Lourey said the delay is frustrating, he assures those concerned that this specific approval process is not outside the norm.
“CMS submitted a request for additional information,” said Lourey. “It’s not a denial. It’s a question that needs an answer. CMS needs some clarification. We’re going to give them that clarification.”
Scott Killerud and Ellen, his wife, also members of the original group who fought to change the law, are cautiously optimistic.
“We are hopeful that the federal agency, CMS, which is questioning more information from DHS is doing so in a sincere effort to finalize and enact the will of the affected people of this state,” said Killerud.
Sen. Lourey is confident that the outcome will do just that.
“DHS has a very thorough knowledge of the rules and what we are allowed to do,” said Sen. Lourey. “We crafted this (law) to fit within those rules. This is just part of a somewhat frustrating approval process. It’s not more than that.”
At press time, written communication from DHS to CMS was received stating in part, “Fundamental fairness demands that CMS approve this amendment, given that people who received Medicaid coverage from January 1, 2014 to July 1, 2016 were required to purchase insurance, were required to enroll in Medicaid, and who, without this approval, would have to be concerned about a future recovery from their estate that could far exceed the cost of the premiums they might otherwise have paid for unsubsidized coverage outside of the insurance exchange.”
CMS has another 90 days to approve, disapprove or ask for additional information regarding the amendment to the Medicaid state plan.
“We have made it clear that time is of the essence on this amendment,” said a spokesperson for DHS.
Despite assurances, Rick Rayburn said he won’t rest easy until federal approval is written in stone, particularly in light of the fact that this situation could have been avoided in 2014 with the expansion of the Affordable Care Act when individual states had the option of passing on the estate claim option. During months of research, he found that Washington and Oregon avoided the situation by getting pre-approved to pass on the estate lien option of health care cost recovery.
“Minnesota is one of only six states in the Union to choose estate liens as a recovery option,” said Rayburn.
Until final approval comes from CMS to DHS, Rayburn said he and his coalition will continue to make calls, write letters, contact state representatives, DHS and CMS in an effort to “rattle cages until justice is served.”