“It needs to be removed at the federal level because it can come back to haunt us at any time, really,” said Julie Gelle of Sandstone.
At issue is the so-called “55 clawback.” Congress in 1993 passed a law requiring states to recover the cost of long-term care for Medicaid recipients 55 and older via estate recovery after their death. States also were given additional authority to recover from the estates for other health expenses.
Minnesota took that option, said state Sen. Tony Lourey, DFL-Kerrick, but for a long time it affected almost no one. Recipients of Medicaid — known as Medical Assistance in Minnesota — were subject to an asset test, meaning that those who qualified for Medicaid had no estates from which to recover.
That changed when Minnesota opted for Medicaid expansion in 2014 under the Affordable Care Act, Lourey said. The income level for Medical Assistance eligibility was raised, and the asset test was discarded. Many Minnesotans became eligible for the program who hadn’t been eligible before. That included small farmers who were property rich but money poor.
Some Pine County residents said they were steered to Medical Assistance without realizing the help they received would count against their estates. Scott and Ellen Killerud, who live on a farm near Willow River, discovered in late 2015 that they’d accumulated $11,000 in potential estate claims. Scott Killerud told nearby farmer Rick Rayburn; he and his wife, Rose, found their claims reached $30,000. Rayburn issued a call to arms, of sorts, posting a letter in a Sandstone laundromat, where Julie Gelle saw it. When she checked, she found that she and her husband, Robert, had reached $15,000 in estate claims.
Feeling misled and mistreated, the Rayburns, the Gelles, the Killeruds and a few others got the word out to any who would listen, demanding that the clawback be removed. They found an ally in Lourey, who led a legislative effort to overturn estate claims for 55-and-older Medicaid recipients for all except long-term nursing care.
Lourey initially met resistance on both sides of the aisle, he said, but on the last day of the 2016 legislative session that year’s $182 million state supplemental bill was passed with a provision that estate claims could no longer be accrued for Medical Assistance. The legislation made that retroactive to Jan. 1, 2014, meaning the claims against the Rayburns and others were reset to zero. Gov. Mark Dayton signed the bill into law.
The estate claims fix still had to be approved by the federal Centers for Medicare and Medicaid Services, which did so on Dec. 20, 2016, only stipulating that it also must be retroactive before 2014.
Problem solved? Not to the satisfaction of Minnesotans who would have been affected by the estate claims, or their advocates.
“What one Legislature and governor did, another Legislature and governor down the road might decide to undo,” said Buddy Robinson, staff director for Minnesota Citizens Federation Northeast and co-coordinator of the Greater Minnesota Health Care Coalition.
Lourey flatly rejects the idea that any Minnesota governor or Legislature would do so, calling it “not in the realm of possibility.” Nonetheless, he joined with state Sen. Scott Jensen, R-Chaska, in writing a letter encouraging the Minnesota congressional delegation to spearhead a federal fix eliminating the estate claim option.
“It would just be really good to get the federal legislation passed that finally sets this to rest,” Lourey said.
That needs to happen in part because the clawback is a form of age discrimination, said Lisa Krahn, executive director of the Seven County Senior Federation, which includes Aitkin, Carlton and Pine counties.
“Our organization thinks people should be treated more equally,” Krahn said. “And this is the ultimate kind of discrimination.”
It also threatens the ability of small farmers to keep their farms in the family, said Paul Sobocinski, an organizer for the Land Stewardship Project, a Minnesota nonprofit.
“If farmers are eligible for Medicaid, and then there’s a lien stuck on them, that’s really a bad situation,” Sobocinski said. “That kills the viability of the future of that farm for the next generation.”
Rayburn met last month with members of U.S. Rep. Rick Nolan’s staff in Duluth as they considered crafting a bill, he said.
A spokeswoman for Nolan said a bill is being drafted, but it’s “very early” in the process.
The bill’s framers are looking at two options, according to Rayburn. One would simply remove the sentence from the original law that allowed the clawback. Under the other, states that have instituted the clawback would be able to keep it and other states could implement it, but they wouldn’t be allowed to do so retroactively.
Rayburn prefers the first option, which he said would “fix something that was definitely wrong.” But it might spark resistance from states that are expecting returns from estate recovery, he said.
Nolan’s representatives have told him the latter option is more likely to pass, Rayburn said.
Will a Congress that is having difficulty keeping the government funded pay attention to a legislative issue raised by Pine County farmers and landowners?
Lourey is cautiously optimistic. “Congressman Nolan is very, very interested in this,” he said. “I know that our senators are also interested. I think it might be something that gets in.”
But for now, the people who raised the cry in the first place are still wary, Krahn said.
“People won’t apply,” she said. “They won’t talk to the county because they’re worried about this issue.”
The Rayburns learned that they qualified, barely, for a tax credit this year. They wouldn’t need Medical Assistance or MinnesotaCare, a program for people with slightly higher incomes that requires only modest premium payments.
But the insurance broker they spoke with couldn’t guarantee they wouldn’t be siphoned into MinnesotaCare, Rayburn said, so they decided to go without health insurance.
“My wife has become gun shy,” he said. “She said if it’s a government plan, we’re not going to do it.”
Similarly, Julie Gelle is going without health insurance for now, she said; her husband is over 65 and covered by Medicare.
“I used to be a trusting person,” she said. “I am no longer trusting. I am very suspicious of our government.”
But there’s one government program she seems to be OK with, and it will affect her soon.
“May 1, I get Medicare,” Julie Gelle said. “Woo-hoo! I’ll have health insurance. I’m counting the days.”