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Senate Votes Down Medicaid Estate Recovery Relief Amendment

Tue, 05/22/2001 - 11:00pm — Karen Stevenson
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Sen. Russell Feingold (D-WI) tried to add an amendment to the income tax relief bill which would have made Medicaid estate recovery optional for the states. Calling it a "100 percent death tax" for poor older people, he suggested paying for the cost of this provision by scaling back the proposed reduction in the estate tax. As the law currently stands, states are required to recover the cost of Medicaid services from the estate of deceased beneficiaries by taking measures like putting liens on their homes.

As reported in the Congressional Record, he said "The average annual cost of nursing home care is about $40,000 or about $110 per day. That cost poses an enormous burden on many elderly or disabled individuals, many of whom are forced to spend down a lifetime's savings before they become poor enough to qualify for Medicaid. After having spent down those savings, a home may be the only thing they have left to leave to their children...and there is strong anecdotal evidence that many forgo needed care in order to avoid losing their homes and personal property to the estate recovery program."

He continued, "The estate recovery program does little to offset the cost of Medicaid, accounting for only one-tenth of one percent of the funding for the program according to data from the Congressional Research Service. The estate recovery program can work a real hardship on surviving spouses. After surviving the chronic illness of their loved one, and spending down their life's savings, they then must cope with a lien on their home. As the Congressional Research Service notes, though claims on an individual's estate cannot be acted upon until after the death of the surviving spouse, liens placed on houses can affect an individual's financial credit, preventing that spouse from mortgaging property, getting a bank loan, or taking out a new credit card in order to pay for essential living expenses such as home repairs like a new furnace or a leaking roof."

Senator Max Baucus (D-MT) responded "Medicaid spend-down is a large problem. All who have studied this know it needs to be dealt with. This amendment was offered in committee and defeated in committee. It is not germane to this bill. This is a tax bill, not a Medicaid bill. I urge Senators not to support it." The amendment was voted down by a vote of 41 to 58.

Sen. Russell Feingold (D-WI) tried to add an amendment to the income tax relief bill which would have made Medicaid estate recovery optional for the states. Calling it a "100 percent death tax" for poor older people, he suggested paying for the cost of this provision by scaling back the proposed reduction in the estate tax. As the law currently stands, states are required to recover the cost of Medicaid services from the estate of deceased beneficiaries by taking measures like putting liens on their homes.

As reported in the Congressional Record, he said "The average annual cost of nursing home care is about $40,000 or about $110 per day. That cost poses an enormous burden on many elderly or disabled individuals, many of whom are forced to spend down a lifetime's savings before they become poor enough to qualify for Medicaid. After having spent down those savings, a home may be the only thing they have left to leave to their children...and there is strong anecdotal evidence that many forgo needed care in order to avoid losing their homes and personal property to the estate recovery program."

He continued, "The estate recovery program does little to offset the cost of Medicaid, accounting for only one-tenth of one percent of the funding for the program according to data from the Congressional Research Service. The estate recovery program can work a real hardship on surviving spouses. After surviving the chronic illness of their loved one, and spending down their life's savings, they then must cope with a lien on their home. As the Congressional Research Service notes, though claims on an individual's estate cannot be acted upon until after the death of the surviving spouse, liens placed on houses can affect an individual's financial credit, preventing that spouse from mortgaging property, getting a bank loan, or taking out a new credit card in order to pay for essential living expenses such as home repairs like a new furnace or a leaking roof."

Senator Max Baucus (D-MT) responded "Medicaid spend-down is a large problem. All who have studied this know it needs to be dealt with. This amendment was offered in committee and defeated in committee. It is not germane to this bill. This is a tax bill, not a Medicaid bill. I urge Senators not to support it." The amendment was voted down by a vote of 41 to 58.