One last dig: Medicaid collects at the grave - US requires estates to pay Medicaid back under 1993 Omnibus Budget Reconciliation Act

Progressive, The, April, 1998 by nina Siegal

Many recipients, like Margaret Dugger, are not aware that when they sign up for long-term care assistance under Medicaid that they are essentially getting a loan, says Sabatino. What's more, state Medicaid plans are not required to provide the sort of financial disclosure under federal truth-in-lending laws that banks must when processing a loan. "Disclosure is pretty muddy under Medicaid," he says.

Not so, says Russell Mack Porterfield, chief of the recovery section of the California Medi-Cal program. "When individuals apply for the program they are given notification that their estates may be subject to having to repay the program," he says. "We send a notice twice a year to everyone who is over fifty-five years of age advising them of the recovery program. I realize that when they apply for Medi-Cal that there are a lot of papers to fill out, and they may not understand it, but they are notified."

California has had an estate recovery program in place since 1980, when the state legislature passed a law permitting the Medi-Cal program to go after the estates of some Medi-Cal recipients. In the late 1980s, Citizens Action League challenged the measure in a class-action suit against the state, and won in federal court. But the Omnibus Budget Reconciliation Act of 1993 superseded that ruling and allowed California once again to send out the dogs.

Porterfield says the Omnibus Budget Reconciliation Act of 1993 has helped him recover an additional $5 million to $6 million each year. Last year, his department culled some $32 million from its estate-recovery program. "It costs a lot of money to fund the Medi-Cal program, and this is a way of recouping some of those expenses and putting them back into the system," he says. "Since the individuals are no longer alive, they have no need for those assets."

Pat McGinnis, executive director of California Advocates for Nursing Home Reform, disagrees. "We're not talking about $32 million in cash, we're talking about $32 million from people's homes," she says. "The people in this system who end up being screwed are poor people. It shouldn't just be the rich who are allowed to keep their family homes for their kids."

Gregory Wilcox is an attorney in Oakland who represents clients slapped with estate claims. "What I see is people of extremely modest means who want to help preserve the family home," he says. "It's not the wealthy by any means. There are a lot of people who really need the small inheritance they're getting, and they wind up being the subject of quite aggressive collection actions by the state."

Medi-Cal recipient Jewel L. DeMille and her husband Lynn Roy DeMille in 1976 bought a parcel of land for their mobile home in Fort Bragg, a small working-class town just a short drive from the vacationers' haven of Mendocino on the California coast. In the early 1990s, Jewel's daughter, Lynda, moved her own mobile home onto the property to care for her aging parents. Jewel died at seventy-two in 1993, and shortly thereafter, the state of California informed Lynn Roy that it was placing a lien on the family property for $8,400.