“Affordable” care has a problem. it shouldn’t


Andrew Sprung

The US bailout package promulgated by President Biden in March took the Affordable Care Act several steps closer to fulfilling the promise on his behalf: affordable health coverage for all. Federal grants for health plans obtained in the ACA market have been increased at all income levels, and there is no income cap on grant eligibility. Although these subsidy increases are not enacted until 2022, President Biden has called on Congress to make them permanent.

New Jersey lawmakers and Governor Phil Murphy have worked at the state level to make coverage more affordable, adding state grants to federal grants in the ACA market and allocating at least $ 20 million. dollars in 2022 to Cover all children – smoothing the registration process for NJ FamilyCare, investing in registration awareness and (if lawmakers finish the job) registering undocumented children to make the legislation worthy of its name.

Unfortunately, in New Jersey, like in 19 other states and Washington, DC, efforts to make affordable coverage available to everyone are marked with a giant asterisk.

Applicants wishing to benefit from health coverage on GetCoveredNJ, the state ACA exchange launched last fall, are channeled either to the private plan market or, if their family income is below 138% of the FPL (federal poverty level) – which is 1,482 $ for an individual, $ 3,048 for a family of four – to NJ FamilyCare, the state’s Medicaid program. If income qualifies an applicant for it, she must sign this declaration:

“I acknowledge that I have taken note that the Division of Medical Assistance and Health Services (DMAHS) has the authority to file a claim and lien against the estate of a deceased Medicaid beneficiary, or a former beneficiary, for recover all Medicaid payments for services received at or after age 55…. ” [More intimidating detail follows.]

Affordable care with one outlet

What is that? The premiums paid partly by the federal government and partly by the state for any member over 55 are essentially a loan that the State can recover from the enlisted person’s estate. These premiums are subject to Medicaid Estate Collection. Upon the death of the registrant and their spouse, and when the surviving children are over the age of 21, the state can recover the full value of the premiums paid to the managed care companies that now insure most Medicaid registrants of the state.

From February 2021, 170,000 people enrolled in NJ FamilyCare were aged 55 to 64, and 9,200 of them were receiving long-term services and supports (LTSS). All of them, including some 160,000 current LTSS non-registrants, are potentially subject to inheritance recovery. Hundreds of thousands of near-elderly adults are not currently enrolled in NJ FamilyCare but have been enrolled at some point since the launch of the ACA Medicaid expansion in 2014.

While generating anxiety and potential serious financial damage for NJ FamilyCare registrants, estate recovery generates insignificant income for the state. According to 2021 report on Medicaid by MACPAC (Medicaid and CHIP Payment and Access Commission), a non-partisan agency advising the federal government, Medicaid estate collection totals in New Jersey in recent years have ranged from $ 12.2 million to during fiscal year 2015 to $ 18.3 million in 2018. The MACPAC chapter of the report on estate recovery also recommends limiting recovery against LTSS beneficiaries – making this recovery optional rather than mandatory for states , allowing states to pursue collection for services actually received rather than premiums paid to managed care companies, and establishing minimum standards for hardship exemptions, which vary widely from state to state. The report points out that the burden of estate recovery falls disproportionately on the poorest registrants, while those who own assets often get professional help to protect those assets, and “The pursuit of small estates contributes to generational poverty. and inequality of wealth, placing a particular burden on people of color. . “

How many NJ FamilyCare registrants who have not received long-term care services have been subject to an estate recovery? These data are well hidden. But the difficult fact that all Medicaid payments for services received after age 55 are subject to collection from the estate is shown on the “Authorization / Acknowledgment page of all NJ FamilyCare applications (both online and in print)” , according to a DHS memo. Enrollment assistants report that this “recognition” undermines confidence and leads to the departure of large numbers of potential enrollees.

“Flagrant offense”

Medicaid wealth recovery originally targeted recipients of long-term care services, such as retirement homes or home nursing, funded by Medicaid. In 1993, the omnibus spending bill that launched the Clinton administration’s legislative efforts required states to recover the assets and property of recipients of long-term Medicaid services and supports. States also retained the ability to claw back other Medicaid benefits obtained above age 55.

The ACA Medicaid extension, which extends eligibility to all adults with incomes below the 138% FPL threshold in the 36 states that have enacted it to date, has complicated matters. The ACA encouraged and even obligatory Americans to get “affordable” care – or face financial penalty for not having insurance; the so-called “individual mandate” penalty was canceled by Congress as of 2019, but New Jersey adopted its own mandate and penalty. For those who do not have access to employer sponsored or other sponsored insurance and are looking for coverage on ACA scholarships, Medicaid is the only option if their income is below the Medicaid eligibility threshold. Making the “affordable” coverage offered primarily as a long-term loan is a flagrant violation of ACA’s mission.

Under President Obama, the federal Center for Medicare and Medicaid Services (CMS) recognized this. A 2014 letter to Medicaid directors has stated its intention to “explore options and use all available authorities” to limit estate recovery to long-term care. In the meantime, the letter says, CMS encourages states not to pursue estate recoveries against expanding Medicaid populations and notes that there are special rules limiting recoveries.


Although CMS never followed through on this intention, some states that have extended Medicaid have acted alone. In 2015, 24 states pursued inheritance recovery for non-LTSS care, and only seven did not. Today, while 20 expanding states – including New Jersey – and Washington, DC pursue real estate recovery for the expanding population, 18 expanding states are not.

A bill (A-1023 / S-885) introduced to the state legislature in early 2020 by MP Joann Downey (D-Monmouth) and Senator Joe Cryan (D-Union) would end estate recovery for non-LTSS registrants in NJ FamilyCare, as well as to protect certain types of assets against recovery for those who are subject to it.

Versions of this bill have been dragging on for several years without leaving committee. This inaction should end now, as the state and nation end years of stasis in a bid to ensure ACA fulfills its promise of affordable care for all. While reaching out to vulnerable communities to enroll their children in NJ FamilyCare, the state cannot continue to cover the pitfalls of their grandparents.

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