Georgetown Journal on Poverty Law and Policy
Volume XXXII, Number 1, Fall 2024
ARTICLES
Hidden Until the End: The Need to Inform Medicaid
Enrollees of Estate Recovery Costs Before Their Death
Ashley Bassel Grith*
ABSTRACT
Medicaid provides health care coverage to approximately one in every five
individuals living in the United States. The program insures some of the country’s
most economically disadvantaged populations, including low-income seniors and
low-income individuals living with disabilities. Yet, Medicaid is the only federal
public assistance program in the United States that requires certain recipients to
pay back the amounts spent on their behalf. Under the Medicaid estate recovery
program, states are required to pursue recovery of payments made for long-term
care services from the estates of individuals who received such services at age
fifty-five or older or who were determined permanently institutionalized. The
estate recovery program essentially transformed what was once an entitlement
into a loan that must be repaid from Medicaid enrollees’ estates.
Currently, Medicaid applicants and enrollees are often unaware of the financial
consequences of estate recovery loans, as federal law does not require states to pro-
vide notice of estate recovery costs to applicants and enrollees. Likewise, a review of
all states’ estate recovery laws, Medicaid applications, and publicly available estate
recovery brochures indicates that no state proactively provides notice to enrollees of
their accrued estate recovery costs. Instead, states typically send the first notice of
estate recovery costs after the enrollee dies at the time of collection. This delayed
notice leads to devastating emotional and f inancial distress for affected families and
deprives enrollees of the ability to make informed health care decisions. To solve
this problem, this Article proposes a federal requirement that states provide the costs
of estate recovery to Medicaid applicants and enrollees. As the number of individu-
als needing long-term care is expected to rapidly grow during the next three deca-
des, the detrimental impact of the program’s lack of transparency will become more
*Assistant Professor of Law, Belmont University College of Law. I would like to thank my
research assistants, Sander Fess, Mason Bixenman, Jonah Riojas, Smith Kaiser, and Shelby McGuire, for
their contributions to this Article. I am deeply grateful to my husband, Brian, for his unwavering
support and encouragement, and to my parents, John and Barbara Bassel, whose lifelong dedication to
helping the underserved has inspired my work. Finally, I would like to thank the dedicated public
servants at Tennessee’s state Medicaid agency, TennCare, for giving me the opportunity to see
firsthand the importance and impact of innovation in Medicaid. © 2024, Ashley Bassel Griffith.
1
widespread. To safeguard the ability of older and disabled individuals to make
informed decisions regarding their health care, estate recovery costs should be
brought to light when such individuals are better able to make health care decisions
rather than after their death.
I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II. THE MEDICAID PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A. Medicaid Long-Term Services & Supports . . . . . . . . . . . . . . . . . . . . 8
B. Medicaid Service Delivery Models . . . . . . . . . . . . . . . . . . . . . . . . . 10
III. THE ESTATE RECOVERY PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A. Federal Estate Recovery Framework . . . . . . . . . . . . . . . . . . . . . . . . 13
B. Estate Recovery Exemptions and Hardship Waivers . . . . . . . . . . . . . 15
C. Calculation of Estate Recovery Claims . . . . . . . . . . . . . . . . . . . . . . 16
IV. CURRENT LAW DOES NOT REQUIRE ADEQUATE NOTICE OF THE
FINANCIAL IMPACT OF ESTATE RECOVERY . . . . . . . . . . . . . . . . . . . . . . . . 19
A. Federal Estate Recovery Notice Requirements. . . . . . . . . . . . . . . . . 19
B. State Estate Recovery Notice Requirements . . . . . . . . . . . . . . . . . . . 20
C. State Estate Recovery Notice Practices . . . . . . . . . . . . . . . . . . . . . . 23
D. Medicaid Enrollees and Their Families’ Surprise and Confusion
Regarding Estate Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
V. MEDICAID ENROLLEES SHOULD RECEIVE NOTICE OF ESTATE RECOVERY
COSTS DURING THEIR LIFETIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
A. Medicaid Enrollees’ Ability to Weigh Options for Medical Care and
Assess the Value of Medicaid Services . . . . . . . . . . . . . . . . . . . . . . . 28
B. Medicaid Enrollees’ Ability to Document Eligibility for Exemptions
and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
C. Medicaid Enrollees’ Medical and Health Literacy Limitations. . . . . 34
D. The Public Policy of Protecting Loan Recipients Through Required
Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
VI. A FEDERAL NOTICE REQUIREMENT IS NEEDED TO ENSURE MEANINGFUL
NOTICE OF ESTATE RECOVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
A. Potential Objections to the Proposed Notice Requirement and
Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1. The Proposed Notice Requirement is Feasible for Medicaid
Agencies ................................................ 41
2. As a Matter of Law, an Estate Recovery Claim Arises Upon the
Receipt of Services ....................................... 43
3. Federal Law Broadly Regulates Medicaid Notice Requirements . . . 44
2 The Georgetown Journal on Poverty Law & Policy [Vol. XXXII
4. Retrospective Capitation Rate Adjustments Do Not Prevent
Implementation of the Proposed Notice Requirement .......... 46
5. California’s Approach Unfairly Shifts the Burden of Notice to
Medicaid Enrollees ....................................... 47
VII. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
I. INTRODUCTION
Salvatore LoGrande enrolled in Medicaid in Massachusetts to receive needed
medical care during his battle with cancer.
1
Amanda Seitz, States Try to Seize Medicaid Patients’ Homes After They Die to Recoup
Healthcare Costs, L.A. TIMES (Mar. 18, 2024), https://www.latimes.com/world-nation/story/2024-03-
18/state-medicaid-offices-target-dead-peoples-homes-to-recoup-their-health-care-costs.
During his Medicaid enrollment,
Mr. LoGrande received long-term care at home, briefly entered the hospital due
to pain from cancer, and later received hospice care.
2
Mr. LoGrande passed away
in 2016.
3
One year after he died, his daughter, Sandy LoGrande, received a letter
from Massachusetts’ Medicaid agency stating that Mr. LoGrande’s estate owed
the agency $177,000 for his Medicaid expenses.
4
Ms. LoGrande thought that the
letter was a mistake, as this was the first time that either Mr. LoGrande or his fam-
ily had received a bill for his care.
5
The letter to Mr. LoGrande’s estate was not a mistake, but instead is part of
the federally mandated Medicaid estate recovery program.
6
Under this program,
state Medicaid agencies must pursue recovery of the payments made for long-
term care services from the estates of individuals who received these services at
age fifty-five or older or who were determined permanently institutionalized (the
“aged and institutionalized”).
7
In other words, in exchange for providing medical
care, Medicaid provides the aged and institutionalized with a loan.
8
State
Medicaid agencies are then required to try to collect on this loan after the
Medicaid enrollee’s death.
9
While comprehensive data regarding the total number
of estates pursued and average recoveries is not available, aggregate estate
1.
2. Id.
3. Id.
4. Id.
5. Id.
6. 42 U.S.C.A. § 1396p(b) (West, Westlaw through Pub. L. No. 118-66).
7. Id.; States must try to recover the costs of long-term care services as well as related hospital and
prescription services. Id. At their option, states can also pursue recovery of the costs of any items or
services under the Medicaid State Plan. Id. § 1396p(b)(1)(B)(ii).
8. See In re Est. of Burns, 928 P.2d 1094, 1101 (Wash. 1997) (finding that Medicaid estate
recovery transformed the recipient’s property right in Medicaid payments into a loan to be repaid from
estate assets); Est. of Wood v. Ark. Dep’t of Hum. Servs., 894 S.W.2d 573, 576 (Ark. 1995) (describing
estate recovery as “a loan from DHS to be repaid from the assets of her estate”).
9. See 42 U.S.C.A. § 1396p(b).
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