Here & Now

Jon Richards Criticizes Medicaid Estate Recovery Changes

Frederica Freyberg:.

On the complex issue of Medicaid estate recovery expansion, Milwaukee Democratic representative, John Richards, voted against the measure. He joins us now from Milwaukee. Thanks very much for doing so.

Jon Richards:

You bet.

Frederica Freyberg:

If the purpose of this estate recovery expansion is save money for the state, what’s the affect on long-term care patients and their families in your mind?

Jon Richards:

It’s going to be a big affect. If you have a spouse who has a stroke or who has Alzheimer’s, the state government is going to be involved in your life until you die, and then will be involved with your estate. It’s really something that's going to be a very big change to the landscape here in Wisconsin, and people need to be aware of it. I think that– We've always had an estate recovery program in Wisconsin, and we're required by law to have one and we should have one.

What’s different is that this new law is much more aggressive in going after the assets of someone who gets Medicaid. So, again, if you have a stroke or Alzheimer’s and you have to go on Medicaid to get into a nursing home, that’s going to make a big, big change in your life and your children's lives, and potentially your grandchildren’s lives.

Frederica Freyberg:

Do the new provisions hurt surviving spouse’s more than the estate recovery did before?

Jon Richards:

Oh, yes, it does. I mean, it certainly limits what you can do with your assets. It limits the ability to save money for your own needs because the state will now have a claim against your share of the marital property assets, not just the person who died or your spouse. So that’s a big change.

A number of people, including our legislative council believes that– That's our non-partisan legislative council. The attorneys who work with the legislature. Believe that this violates federal law and it’s going to be a real problem, and I think this will certainly be challenged in court if this continues moving forward with this. Another potential violation of federal law is a section in here saying that the assets that are used to make money, in other words, a small family business or a small family farm, would be included in the assets for the purposes of determining how much money you have. And that is something that is also a real problem and a big change in the landscape. That's something that's going to make it much harder for people to transfer their family farm or business to the next generation.

Frederica Freyberg:

Representative Strachota was talking about how in the joint finance vote there were kind of a list of exceptions so that the heirs, people who might inherit or be passed along a farm or business or something like that, actually wouldn’t be hurt by that.

But you– That's not accurate.

Jon Richards:

That’s not true. No, it’s not accurate. All we did in joint finance is said we're going to put on hold the provision that talks about promissory notes, and we’re no longer going to presume that promissory notes were some sort of improper divestment proceeding. But really the whole issue about transferring for fair market value still stays on the books, not affected at all by what we did in joint finance. And so, if you talk to anybody who does the legal work in this area they’ll tell you that that is going to be a real issue for people, and people should be talking to other law attorneys if they have a real concern about transferring a business to the next generation.

Frederica Freyberg:

What about the argument that families who can accord to pay for nursing home care, for example, are getting this benefit? Or as was quoted, that the public is fed up with paying taxes for programs that benefit people who can support themselves?

Jon Richards:

What happens oftentimes is a couple, one member of a couple, will have a stroke. That couple will use up their resources to pay for a nursing home bill, and they get down to that $115,000 that you’re allowed to keep under the Medicaid program and receive Medicaid. That is the garden variety case here. And that’s what this program, these changes, go after, the couple that spent down. Now there are a couple of people who abuse the system, and I think that’s wrong. And that’s why we have an estate recovery program in place that should remain in place.

I think this goes way too far to collect a tiny amount of money for the state at the expense of real problems with individuals, and with the banks and real estate companies and title insurance companies that have to comply with this law.

Frederica Freyberg:

All right. Representative John Richards, thanks very much.

Jon Richards:

All right. Thank you, Frederica.