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Minnesota Senate forwards bill to protect estates of Medicaid recipients

Constituents argued that future legislators could reverse 2017 change protecting MNsure enrollees from recovery of funds

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ROCHESTER, Minn. — The Minnesota state Senate on Tuesday, Jan. 26, took up the question of whether to expunge records showing the financial value of Medicaid coverage provided to potentially thousands of Minnesotans between 2014 and 2016, a move meant to protect the recipients from future attempts to place a lien on their estate and recover those expenditures.

The bill, sponsored by Sen. Jason Rarick, R-Pine City, is in response to lingering constituent complaints regarding a 2017 Rarick-authored repair to the state's first rollout of the health insurance marketplace. Critics say that repair left them vulnerable to receiving an estate tax, should future lawmakers revisit the 2017 legislation.

The repair to MNsure — Minnesota's health insurance marketplace — followed the discovery in 2016 of a lack of disclosure in the early MNsure platform.

Jason Rarick.jpg
Jason Rarick

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After enrolling in MNsure in 2014 and having no choice but to be funneled into expanded-eligibility Medicaid based on his income, Rick Rayburn of Willow River, Minn., learned in 2016 that the state intended to recover the value of that coverage from his estate upon his death, something he had not been told upon enrolling in MNsure.

By then Rayburn was in debt of $30,000 to the state for coverage he never wanted, as he had previously been covered by Blue Cross. When he asked if he could repay the amount and protect his estate, the state told him there was no way he could pay back this sum.

States are required by the Affordable Care Act to recover the cost of nursing home care from the estates of Medicaid recipients, and have the option of recovering any expenses including Medicaid for residents over 55. Minnesota in 2017 undid the last portion of that guidance.

"Early on during the Affordable Care Act rollout tens of thousands of Minnesotans who enrolled through MNSure for health insurance were diverted to the Medicaid program," Rayburn testified to a remote meeting of the Committee on Human Services Reform Finance and Policy.

"In 2016 they learned they had not received health insurance, rather a loan, through Medicaid for all expenses paid on their behalf. This Medicaid loan was payable on death from their estates."

"Even though (previous legislation) currently protects Medicaid recipients from recovery," Rayburn said, "it does not prevent a future recovery of past expenses. All of those who signed up in 2014, 2015 and 2016 without notification of recovery are still at risk of recovery under a state or federal law change."

Tuesday's proposed legislation, which passed the committee on a unanimous voice vote, would require "state agencies to destroy data related to certain Medical Assistance recipients who were newly eligible as a result of the 2013 expansion of Medical Assistance ... The statutes have subsequently been amended to exclude retroactively this population from estate recovery."

"They're asking to have the record against that eliminated so no one can look back and reinstitute those (charges) and have the liens on their estates when they do pass," Rarick says.

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"They need to maintain some of these records for at least a while, so we're trying to thread that needle," he added, "how can we protect individuals so they don't have to worry about this coming back to haunt them, but allow the agency to have the information they need for a federal audit."

Rarick says the committee is hoping to disconnect names from information to preserve information necessary for an audit, while protecting constituents from the reversal of the 2017 change.

"Ultimately it's about estate planning and knowing what is there," he said. "They didn't want to leave that burden on their children ... it was from being completely unaware what was there."

Paul John Scott is the health correspondent for NewsMD and the Forum News Service. He is a novelist and was an award winning magazine journalist for 15 years prior to joining the FNS in 2019.
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