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The Difference between Obamacare and Long Term Care

I am often questioned about how Obamacare has affected long term care and Medicaid.  My answer is that it really hasn’t at all because mostly Obamacare addresses this country’s health insurance problem.   The Medicaid programs that pay for long term care haven’t changed as a result of the Affordable Care Act.  But there is a Medicaid program that covers basic medical needs for the indigent.  Because of Obamacare, more people are enrolling in that Medicaid program, NJ FamilyCare.

A recent Star Ledger article about Medicaid estate recovery illustrates the confusion.  It talks about the prospect of having to pay the State back the benefits received from Medicaid.  The State places a lien on the estate when the person dies.  It is what is known as Medicaid estate recovery and is something I wrote about in last month’s blog (See March 17 and March 24 blog posts.)  It is not new and it is not unique to Obamacare.  Estate recovery has been the law for more than 20 years.

The Affordable Care Act is supposed to make health care insurance available and affordable to millions of uninsured Americans.  It also encourages states to expand their Medicaid programs to cover some lower income citizens who can qualify.   Many are concerned that if they apply for and receive Medicaid coverage, they will now be subject to estate recovery.

Approximately 1.4 million New Jersey residents signed up for Medicaid’s FamilyCare program.  The overwhelming majority of them are young and middle aged.  Again, what they signed up for is health insurance coverage, not long term care coverage.  These people are less likely to have any assets that could be subject to state liens so they should not be concerned about estate recovery.

Additionally, the amount of money being paid out by Medicaid under FamilyCare will most likely be much less than the benefits paid out under Medicaid’s nursing home care program.  That’s because, generally, the Medicaid recipients of NJ FamilyCare are younger and healthier than the recipients of nursing home care, which the state pays at the rate of approximately $6000 per month.  Accordingly, the potential lien will be much less.

The Star Ledger article highlights a 60 year old couple that declined to enroll in Medicaid because they feared estate recovery.  If that couple is healthy and is applying under the FamilyCare program, a potential estate recovery lien would be minimal.  The bigger problem down the road is long term care.  That could be 5 or 10 or more years in the future but without planning now for what lies ahead, they could lose their entire family fortune.