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New Medicaid Law Could Have Impact on Estate Planning

The Affordable Care Act has now helped millions of Americans get health insurance. However, it’s unlikely that an average person completely understands every aspect of the new law. For example, a little-known facet of the Medicaid program could cause some Americans to rethink their coverage options.

The law that has people concerned involves the fact that states are allowed to recoup the Medicaid benefits they paid out by putting claims a person’s estate after he or she dies. While experts state that the likelihood of this actually happening is low, it has still deterred many people from taking part in Medicaid. Older citizens that have been on Medicaid for years are technically vulnerable to asset seizure after they die, meaning that choosing Medicaid could have a profound impact on a person’s estate plan.

This aspect of the law is not new and was not created by the ACA, however. Congress enacted the policy in 1993 to give states a strategy for recouping Medicaid benefits from long-term patients, which can end up costing taxpayers huge amounts of money every year. The law was subsequently expanded to allow states to seek assets for any care that a person on Medicaid received after the age of 55. This issue is now receiving more attention because the ACA expanded Medicaid so that millions more Americans could potentially participate.

It is not yet known how vigorous state governments will be about seizing assets. Many officials are still waiting for the federal government to provide clarification regarding asset recovery. For now, any Massachusetts Medicaid participants that are concerned about the government raiding their estate should consider seeking legal help in order to determine if they’re at risk under the current law.

Source:, “Little-known aspect of Medicaid now causing people to avoid coverage” Sandhya Somashekhar, Jan. 23, 2014

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