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Archive for Monday, September 27, 2004

SRS seizes client assets

Law gives state power to recoup Medicaid costs

September 27, 2004

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The Friday before the Labor Day weekend, Mike Copeland received a letter that scared him to death.

The state was telling Copeland, of Prairie Village, who suffers seizures and has brain damage from a long-ago fireworks accident, that it could put a lien on his house to recover the cost of his health care.

"I guess now I'm a renter of the state," he said.

The letter explained that he could opt out of Medicaid, the taxpayer-funded health insurance for low-income people.

But then he would have no way of paying for his life-maintaining medication.

For Copeland, it came down to this: Keep your meds, lose your house. Or keep your house, lose your meds -- and eventually your life.

"In the state of Kansas, isn't suicide illegal?" Copeland asked.

New state law

Copeland was among more than 60,000 Kansans who recently received letters informing them of a new state law that gives the state more power to take assets from Medicaid recipients.

The law takes effect Friday.

For people like Copeland, shock doesn't begin to explain his reaction to the new rules.

Janet Schalansky, secretary of the Kansas Department of Social and Rehabilitation Services, conceded that the law had raised concerns across the state.



















Topeka -- A law that takes effect Friday will give the state greater powers to recover assets of Medicaid recipients.Janet Schalansky, secretary of the Kansas Department of Social and Rehabilitation Services, conceded that the law has raised concerns.But, she added, it will help "us conserve much-needed Medicaid funding to be able to serve as many low-income families and individuals as we can."Medicaid is the state and federally funded program that provides health care coverage for low-income people.The law affects only Medicaid recipients who are 55 and older, or those who receive long-term-care service through a nursing facility.It will allow the state to recover assets from life insurance proceeds, estates, trust funds and jointly owned property of decease clients. If the Medicaid recipient has a surviving spouse, recovery would be delayed until the spouse's death.Estate recovery would not be used if the individual has a surviving minor or child with disabilities.The changes also will allow SRS to place a lien on a home owned by a Medicaid recipient to allow for recovery should the property be sold prior to death. Liens may only be used if Medicaid pays for at least six months of nursing home facility care, and a lien cannot be placed on a home if a spouse, minor or a child with disabilities still is living in the residence.For more information, call SRS toll-free at (888) 369-4777.

But, she added, it would help "us conserve much-needed Medicaid funding to be able to serve as many low-income families and individuals as we can."

Medicaid is a major part of the Kansas budget, totaling more than $1.5 billion per year.

The new law will expand the ability of the state to recover assets from life insurance proceeds, estates, trust funds and jointly owned property. If the Medicaid recipient has a surviving spouse, recovery of assets would be delayed until the death of the spouse. Estate recovery would not be used if the individual had a surviving minor, or a child with disabilities.

The changes also will allow SRS, with certain restrictions, to try to recover assets by placing a lien on a home owned by a Medicaid recipient should the property be sold prior to death.

Replenishing the system

Copeland, 50, who was injured in a fireworks accident in 1977, said he had hoped that after he died, he would be able to leave his house to his niece and nephew.

He said he is on permanent disability and receives $572 each month through Social Security. His prescription drug medicines, which cost more than $1,000 per month, are paid for by Medicaid, he said. Because of his seizures, he can't work.

He said he bought the house after his injury when he received an initial lump sum payment from Social Security.

Under the new rules, Copeland said he was told by SRS that the agency would place a lien on his house.

State Rep. Brenda Landwehr, a Wichita Republican who supported the bill in the last legislative session, said the state must recover what it can to put money back into the system, and to deter fraud.

For years, lawmakers have been hearing stories about middle-income and wealthy people hiding or transferring their assets in order to qualify for Medicaid.

Inheritance 'not a right'

"We had people paying their son or daughter $50,000 a year to mow the lawn," Landwehr said. "That's a way of transferring those assets. The people think there is a right to an inheritance. Inheritance is not a right, it's something that might or might not happen."

She said Medicaid is meant to take care of the "truly destitute," and if a person has assets, then those assets should be used to pay back the program.

Copeland said he knows there are others worse off than he is, but without being able to work and living off of Social Security, he said he feels like he is the kind of person Medicaid was meant to help without an expectation of getting paid back.

"Isn't Medicaid supposed to cover the poor without holding them hostage?" he asked.

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