Medicaid: What you need to know about the letter of the law

4:41 AM, May 3, 2005   |    comments
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At $5,000 to $6,000 a month, that can quickly wipe out a life-savings. So many families have to turn to the government program, Medicaid, for financial help. But after your loved one dies, how would you feel if you got a letter which implied that you could be stuck with a six-figure Medicaid bill and lose your house to foreclosure? A Richmond Heights man says it was like "God had given up on him." Channel 3’s Paul Thomas has what you need to know about the letter of the law. Joe Haluska married a woman he met on Euclid Avenue 50 years ago. He and Laverne grew old together. But, Laverne died in November 2003. She spent her last two years in a nursing home with Alzheimer’s. ”I couldn’t believe it … it just took all the money I had in the bank savings,” Haluska explained. The Haluska’s enrolled in Medicaid, a government health care program for the disabled and the poor. To qualify for it as a couple, the Haluska’s could only have one car, one house, one small life insurance policy and less than $95,100 in cash and other assets combined. All Joe has now is the house they shared … something he thought he was going to lose too. “Yeah, I get a letter from the IRS or I thought ‘what’s this?’ … I’m too old to be paying taxes already,” he said. Turns out the letter was not from the IRS. It was from a lawyer working for the Ohio attorney general trying to recover some of the Medicaid money spent for Laverne’s nursing home care. The letter sent in October reads: ”this lien allows us to initiate a foreclosure.” “I open it up and I see I have a lien on my property over $121,000,” Haluska said. “I thought God had given up on me or something.” Haluska doesn’t owe Ohio $121,000. In fact, as long as he’s in living in his home, foreclosure would be illegal. The letter came from Cleveland-based lawyer, Alan Weinberg, working for Ohio Attorney General Jim Petro. Under the Medicaid Estate Recovery Program, federal rules require all 50 states to have one. Weinberg and 22 other lawyers in Ohio are given the names of deceased Medicaid recipients over the age of 55, like Laverne Haluska. The lawyers check the dead person’s estate, their last will and testament and other assets passed on to relatives in probate court. The money collected is used to offset the more than $10 billion Ohio and the federal government spend on Medicaid each year. The lawyers keep 20 percent of what they collect. Last fiscal year, the special counsel team brought in $16 million for Ohio. Senior Assistant Attorney General Bob Byrne says for every dollar spent, $11 is recovered. “I think it’s doing a great job,” he said. “I think that taxpayers should be happy that we’re out there doing it.” But, not everybody is happy with the way the program is working. Keep in mind, surviving spouses and what they own are exempt from recovery. Certified elder law attorney Pat Schraff says letters like these began appearing in the fall of 2003 shortly after the attorney general expanded the Recovery Program. It’s hard to miss the bold dollar amount described as debt - and hard to miss the appeal for credit card information. What is easy though to misunderstand is that the relative getting the letter is not responsible for any payment. “The obligation is from the estate itself,” it was explained. “So, no person that receives a letter is individually responsible for the claim.” Byrne says the lawyer who sent this letter was told that “this isn’t in the feeling that we want to create.” The lawyer has since replaced the words “first notice,” with the phrase “estate claim.” And the request for credit card information is gone. “Because of that matter of payment, those attorneys tend to be more aggressive and we’ve seen more and more aggressive tactics to try and collect,” it was explained. Attorney Armond Budish, host of the senior issue-oriented show, “Golden Opportunities,” says questionable letters are only addressed after they’ve been delivered to citizens. And he says that leads to bigger questions. “I’m concerned that there are a lot of people out there who have paid improperly,” Budish said. “I don’t know that for sure. I haven’t seen it. But, I can’t believe that people getting these letters aren’t responding to try and pay.” Both elder law attorneys and the state agree that there are people on Medicaid who try to beat the system - who avoid using the their money and assets to pay for nursing home care - and shift the burden to taxpayers. Byrne knows there is a delicate balance between doing the state’s job and getting information from people still grieving. We showed him the letter Joe Haluska got. Keep in mind that the state cannot collect Medicaid recovery from surviving spouses. “Well, first the letter isn’t an appropriate letter and we addressed this," he said. "And these letters are not being used.” In the meantime, Joe Haluska will continue to cherish the memories of a lifetime of love in the home he doesn’t want to leave. Eleven other people were mailed the same type of letter Joe received. After we start looking into this, Haluska got a letter of apology. The lien was taken off his home. A spokesman for the attorney general’s office said the letter was a mistake. So the question is: if some letters were a mistake, do people mistakenly pay into the recovery program? Well, besides training the attorneys who do the collection. Channel 3 was told that journalists along with other attorneys, like Pat Schraff and Armond Budish, are part of the checks and balances system. So if mom or dad is already in the nursing home on Medicaid - what do people need to know? The state has a duty to go after assets that are passed on through probate court, including homes. And in some cases, liens are being placed on homes. Medicaid is expensive - nearly one-fifth of the state budget. But the bottom line is, if you get one of these letters, payment ultimately comes from the dead person’s estate itself.

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