This Federal Program Could Take Your Home After Death

Near a quiet road in the winding hills of Mazeppa, Minn., sits Kevin White’s family home.

A “welcome” sign hangs near the white stove where his mother used to bake fresh bread that would gather kids from the neighborhood. At a nearby kitchen table, White’s grandmother would sit him on her knee to eat burnt toast. White cherishes those memories and wants to give his son more opportunities by passing the house on to him. But a controversial federal program could put a stop to that, and state data shows that White wouldn’t be alone.

Photos courtesy of TPT

The program is called Medicaid Estate Recovery, and it’s a federally mandated system where states can claw back medicaid patients’ bills by going after their property. In Minnesota, the program recovers medical assistance payments to people over 55 who cannot afford long-term care costs. White’s mother was on medical assistance when her health worsened. Months after she died, Kevin got a letter claiming that his mother owed $187,000 in medical assistance expenses—and the state put a lien on their family home to pay it. Months after agreeing to settle the lien, the housing market boomed. That’s when the state canceled the deal and told him the lien had now doubled.

“[It] gives you a bad feeling … like they always want more,” White said. “It’s gotten to where I don’t trust anything they say.”

Minnesota’s program has affected scores of families in recent years, seizing more than $265 million from dead medicaid recipients’ estates. But that’s less than 1% of what the state spends on their long-term care—more than $4 billion a year.

Geneva Finn, the special recovery unit manager for Minnesota’s Department of Human Services, said the program could recover more if not for loopholes that are often used by wealthy families and attorneys. Public workers are too overwhelmed to challenge them.

“You should pay for the cost of your care up to your ability, and I think a lot of really low-income people certainly do that,” Finn said. “We try not to make it a situation where if you’ve got the social capital to hire an attorney and get yourself on medical assistance that you’re able to hide money.”

Differing rules and situations for recovery complicate those efforts. Some counties recover millions, while others take less than half of that.

Estate recovery programs across the nation are tackling the same dilemma. A federal report to Congress by the nonpartisan Medicaid and Chip Payment and Access Commission found that recovery programs are contributing to generational poverty and wealth inequality. One new proposed bill could end the whole thing, and the measure has won support from U.S. Representative Ilhan Omar (D-Minn.) and more than a dozen lawmakers.

For those who are still struggling with huge recovery claims, Kevin White’s advice is to resist.

“Within a couple years, they can take a whole family’s memories. … I don’t think it’s right the way they do that. Try to fight for what you believe in.”