This is a letter sent to Stephanie Armour, the public health care policy reporter for The Wall Street Journal. To read the article that sparked this letter, click here.
Your article in today’s WSJ is one of the most important one I have seen in years. It highlights the inconsistencies in the Medicaid program across the country. The Medicare Catastrophic Coverage Act (MCCA) was passed in 1988 to prevent spouses from impoverishment if a catastrophic illness of the other spouse occurs.
The Medicaid program mandates a minimum of recovery from a probate estate; however, the law allows states to expand recovery. This not only wipes out the assets of a surviving spouse but can bankrupt the entire family. Joint accounts with children, custodial accounts, retirement accounts and life insurance are all fair game.
For years we have been striving to attain a level of consistency across the nation; however, just the opposite has occurred. The inequality is not just applicable to recovery but eligibility too. In 2015, the limit for assets owned by a couple is $119,220, exclusive of the value of a personal residence and $2,980.50 per month in income (including Social Security). Some states will grant Medicaid to a married person over the limit, but most won’t. What makes this egregious is the same limits apply in New York and California as apply in Iowa and Mississippi. There are no regional adjustments.
An example of eligibility inequality is the treatment of IRA account by New York and New Jersey. In New York, the principal of an IRA owned by a patient spouse is exempt but the distributions are available resources. The IRA owned by the well spouse is exempt but counts toward the asset limit. In New Jersey, the distributions and principal of IRA accounts owned by either spouse are available resources and must be exhausted before Medicaid is granted. The only way out of this dilemma is for the couple to get divorced.
I could go on for pages but I believe you understand the dilemma. Again I thank you for your valuable article.
Stephen J. Silverberg, Esq.