How Is That Legal?: Breaking Down Systemic Racism One Law at a Time

Debt After Death

July 27, 2022 Community Legal Services of Philadelphia Season 1 Episode 6
Debt After Death
How Is That Legal?: Breaking Down Systemic Racism One Law at a Time
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How Is That Legal?: Breaking Down Systemic Racism One Law at a Time
Debt After Death
Jul 27, 2022 Season 1 Episode 6
Community Legal Services of Philadelphia

Welcome to America…. where low-income families risk losing their homes if a loved one lives in a nursing home or needs help with personal care at home. 

That’s right. If a Medicaid recipient receives long-term care, the state can recover costs from their estate after they pass away. Stephanie Altman from the Shriver Center on Poverty Law joins us to discuss Medicaid estate recovery. She breaks down who actually receives Medicaid, why estate recovery is a misleading name for taking the very few assets Medicaid patients leave behind, and the racist stereotypes that led to its creation in the nineties.


Stephanie Altman (@StephanieAltma2) is the Director of Healthcare Justice and Senior Director of Policy at the Shriver Center on Poverty Law. She directs the Shriver Center’s work to uncover systemic inequities and create new pathways for opportunity through legislation and systemic changes. She also directs the organization’s healthcare advocacy, representing clients in individual and class actions related to healthcare equity and advocating for accessible healthcare through administrative and legislative forums. 

If you enjoy this show and want to help fight poverty and injustice, consider making a donation to Community Legal Services today! You can also follow us on Twitter @CLSphila to stay connected.

How Is That Legal is a podcast from Community Legal Services of Philadelphia and Rowhome Productions. Jake Nussbaum is our Producer and Editor. Executive Producers are Alex Lewis and John Myers. Special thanks to Caitlin Nagel, Zakya Hall, and Molly Pollak. Music provided by Blue Dot Sessions.

Support the Show.

Show Notes Transcript

Welcome to America…. where low-income families risk losing their homes if a loved one lives in a nursing home or needs help with personal care at home. 

That’s right. If a Medicaid recipient receives long-term care, the state can recover costs from their estate after they pass away. Stephanie Altman from the Shriver Center on Poverty Law joins us to discuss Medicaid estate recovery. She breaks down who actually receives Medicaid, why estate recovery is a misleading name for taking the very few assets Medicaid patients leave behind, and the racist stereotypes that led to its creation in the nineties.


Stephanie Altman (@StephanieAltma2) is the Director of Healthcare Justice and Senior Director of Policy at the Shriver Center on Poverty Law. She directs the Shriver Center’s work to uncover systemic inequities and create new pathways for opportunity through legislation and systemic changes. She also directs the organization’s healthcare advocacy, representing clients in individual and class actions related to healthcare equity and advocating for accessible healthcare through administrative and legislative forums. 

If you enjoy this show and want to help fight poverty and injustice, consider making a donation to Community Legal Services today! You can also follow us on Twitter @CLSphila to stay connected.

How Is That Legal is a podcast from Community Legal Services of Philadelphia and Rowhome Productions. Jake Nussbaum is our Producer and Editor. Executive Producers are Alex Lewis and John Myers. Special thanks to Caitlin Nagel, Zakya Hall, and Molly Pollak. Music provided by Blue Dot Sessions.

Support the Show.

Kee Tobar (00:06):

Hello, everyone. And welcome to How is That Legal, the podcast where we break down examples of systemic racial inequity in the law and policy and talk to experts whose stories of injustice will make you ask, "How in the world is that legal?" I'm your host, Kee Tobar. I'm a legal aid attorney, history enthusiast and chief equity and inclusion officer at Community Legal Services of Philadelphia. Today, we're talking with Stephanie Altman about Medicaid Estate Recovery which has also been called debt after death. Stephanie's the director of Healthcare Justice and senior director of Policy at the Shriver Center on Poverty Law. She directs the Shriver Center's work to uncover systemic inequities and create new pathways for opportunity through legislation and systemic changes. She also directs the organization's healthcare advocacy, representing clients and individual and class actions related to healthcare equity and advocating for accessible healthcare through administrative and legislative forums. When I first learned about Medicaid Estate Recovery, I thought it was a plainly outrageous trap that robs low income homeowners of their intergenerational wealth, particularly black and brown families.

Kee Tobar (01:15):

If you're not familiar with the estate recovery, this is where the states pursue payment for long-term care services after a Medicaid recipient dies. That's right, if someone receives long-term care through Medicaid, the state is entitled to recoup payment after the person dies and in certain situations that includes their home. Now, how in the world is that legal? During our conversation, Stephanie and I talk about, who actually receives Medicaid? Why estate recovery is a misnomer for taking the very few assets Medicaid patients leave behind? And the race based stereotypes that led to the creation of estate recovery in the '90s. Hi, Stephanie. Can you introduce yourself to the audience and give us a brief summary of your work?

Stephanie Altman (02:03):

Sure. I'm Stephanie Altman. I'm the director of the Healthcare Justice team at the Shriver Center and the senior director of policy. The Shiver Center on Poverty Law in Chicago is a national and state policy and advocacy organization. We provide legal representation and policy expertise through a community lawyering model with a focus on striving towards race equity and income equality. Shriver Center also trains advocates and convenes legal organizations across the country through our Racial Justice Training Institute and our Legal Impact Network. We work on economic justice, housing justice, community justice and my team, healthcare justice. Our team, the healthcare justice team advocates for comprehensive healthcare coverage for all, regardless of race, income, national origin, immigration status, or gender. Thank you for having me today.

Kee Tobar (02:56):

Thank you for being here. I was excited when I knew that we were going to have you here today because one, I highly respect Shriver Center but in doing research, looking at the work that you've done, I was really interested in having this conversation with you. So the name of this podcast is How Is That Legal, and so in your work as the director of Healthcare Justice and senior director of Policy at Shriver Center, or maybe as a clinical professor or as an attorney with the Legal Assistance Foundation, can you share with us an example of a law or policy that made you ask yourself, how is that legal?

Stephanie Altman (03:40):

Sure. Many examples come to mind, maybe even daily. But a recent example involved a case I worked on for a new drug that was discovered in the past several years, that has the ability to stop or completely change the picture for a very difficult and very severe childhood disease called spinal muscular dystrophy. This medication that was discovered has the power to really end one of the most severe childhood disabilities which often results in death of a child or significant lifelong disability. And the medication was actually, described to me by one of the leading research physicians who's located in Chicago, as the most significant discovery for children since the discovery for treatment of certain childhood cancers in the 1980s so according to her, one of the biggest things to happen to childhood health in the last 40 years. The medication is extremely expensive and for the low income families that I represent, who are mainly often children of color and children from low income communities, the state Medicaid program really wanted to restrict coverage to this and they had a really restrictive definition of who could get the medication.

Stephanie Altman (05:00):

What the state of Illinois did in order to save costs is, they said a child had to be diagnosed before they were six months old to be able to get this actually, medication covered for this disease even though medical research was showing that even though the disease progresses after that age, that this medication could actually, prevent death or stop severe disability even though it couldn't reverse it and they refused to cover it. And we found out about it from some children's hospitals and some really, really impactful cases when we talked to families and I just couldn't believe it was legal for the state of Illinois to say these children who hadn't even been alive when this medication was discovered, couldn't get it just because they weren't diagnosed at birth.

Stephanie Altman (05:51):

So we represented a child who was five years old she was already in a wheelchair but the medication which the hospital just gave her in order to see if it would work was already stopping some of the progression of her disease which just would've gotten worse and worse. And we won that case with the hospital and changed all the rules going forward and also, were able to pass a law that I think, it just went into effect last year but 29 states are doing it now, which requires testing for this spinal muscular dystrophy at birth so children can get the medication as soon as possible. So that's an example that came to mind when you asked it because I just couldn't believe that, just because a child hadn't been born after the discovery of the medication that the state could actually say, "Sorry, you can't get it because it might help you but it's not going to stop it completely."

Kee Tobar (06:48):

That is an amazing how is that legal. And I'm very happy to hear that you were able to, in your organization, you were able to get that changed. And so today we're going to be talking about part of the healthcare system but also, its intersection with home ownership and even with generational wealth and how it impacts generational wealth. Before we get into Medicaid Estate Recovery which was one of my latest how is that legal, when I learned I've been a legal aid attorney for eight years and I still was like, "Wait, this is a thing?" I want to ask the basic question as like, what is Medicaid? Just to break it down for the audience, what is Medicaid, and on the macro level and who gets it?

Stephanie Altman (07:36):

Sure. So Medicaid is one of the largest public health insurance programs in the United States next to Medicare. Sometimes people mix them up. Medicare is generally, for people, it's a federal program for people who are over age 65 and for some adults who are disabled. But Medicaid is based on your income. And so Medicare is not based on whether you're low income or not Medicaid is. And sometimes people remember that by the word, aid, in it. And so Medicaid started in the 1960s, it's grown since then. I think it's the largest insurer of children in the United States. It is a state by state program. So people say, if you've seen one Medicaid program, you've seen one Medicaid program. Indiana is different from Illinois, it's different from Philadelphia, it's different from New York. But the federal government does set some basic rules. In general, Medicaid covers people who are low income but at different income levels, depending on whether you're a child or a pregnant woman, an older adult or adult with a disability.

Stephanie Altman (08:55):

And until the Affordable Care Act, until Obamacare in 2014, Medicaid did not cover people who did not... Who are not parents, not disabled, not over 65 and not a child or pregnant. So that left 19 to 64 year olds basically, who didn't have minor children, no matter how low income you were, you are not in a category that could get Medicaid and the Affordable Care Act changed that. But as you may know, the US Supreme Court let some states opt out of that. And over 13 states like Florida and Texas and really big states do not have that Medicaid expansion for adults. And so that's in general, what Medicaid is. But it's really different everywhere you look.

Kee Tobar (09:43):

Got it. Thank you for that. And so, I think I wanted to make sure that I asked that question because I think the income eligibility is really an important part to this conversation. Because I want to also explicitly say that if you're in Medicaid and please correct me because you are the expert, Stephanie, that you can't have over $2,000 in assets beyond your home, correct?

Stephanie Altman (10:09):

Yes. That is true for older adults on Medicaid and some people who are disabled. For children and younger adults, there are no asset limits, in general. But we are going to talk today about older adults and these are low income, older adults who need Medicaid in addition, sometimes to Medicare just to pay for those things Medicare doesn't pay for. And one of the most important things is long term care services and supports which almost everyone may need as they get older. And you are right, you cannot have assets over $2,000 other than the house that you live in and be eligible.

Kee Tobar (10:48):

So I wanted to ground it in that because for some people before I start to ask these questions, for those who may be coming from a low income background and have worked and strived to own their home and it's literally, the only asset that they have, how this conversation ends up affecting that population. So when I was first introduced to the practice of Medicaid Estate Recovery, I immediately asked myself, how is this legal? Medicaid Estate Recovery has been called, and I thought this was interesting, debt after death. Can you explain to our listeners what Medicaid Estate Recovery is?

Stephanie Altman (11:29):

Sure. It's complicated in the words, estate recovery make it sound like to me at least, like someone has a mansion and a big estate as opposed to what most people on Medicaid have which is like you said, their own home that they've worked very hard to be able to afford. So what Medicaid does is, it imposes really strict limits on income and assets. And like you pointed out $2,000 is generally the highest asset limit an older adult can have. And in addition to that, in 1993, Congress passed a law that requires states, if somebody is over 55 years old, uses Medicaid or in particular uses a nurse, goes into a nursing home or uses home supports at home to keep them at home. Like a personal attendant or some home equipment or a ramp or things like that to allow them to stay in their home. Medicaid says that after they die that their decedent basically, their survivors, it could be their children, have to pay back that money. And it's the only situation in Medicaid where the state can actually, recover the money back from the family after you die.

Kee Tobar (12:56):

That to me was outrageous, I truly did not understand. Can you discuss, because I know that maybe the listener today, maybe like, "Wait, a second." So if my Papa, grandma, mom owned a home and they were low income and they happened to have to go to a nursing home for whatever reasons, wait, the state can come back and basically force me to sell that home to recover that? Can you discuss what groups may be potentially impacted by Medicaid Estate Recovery? Because I know some people may be worried a bit.

Stephanie Altman (13:35):

Sure. So states can pursue those costs. Generally, I think I'm not an expert across the nation in it. But generally, I think that the assets that states try to recover are the larger assets, especially when they've paid for a nursing home which is costly. So states are supposed to recover from a family member any cost for nursing home coverage, if they can, those home and community based services, like I said or hospital or prescription drugs that are provided to people in hospitals over age 55. There are a lot of exceptions. So there are exceptions to who they can take the assets from after death but we don't think the exceptions are broad enough. During the lifetime of a surviving spouse, they can't recover the house. So if you are married and your spouse goes on Medicaid and is in a nursing home during that spouse's lifetime, that's in the community, you're in the house, they can't recover it, they can't recover it from a surviving child.

Kee Tobar (14:44):

Can we stop right there for a moment? Because I think it's really important to explicitly break down what you just said. You said that if the person who owned the home has a spouse, they can't recover the home while the spouse is alive but there still is the issue of generational wealth in that, right? Because the spouse is living in that home but doesn't at that point technically own that home, they're still is a lien possibly out for those fees so I just wanted to, am I correct? I wanted to just explicitly state that.

Stephanie Altman (15:19):

You are absolutely, correct. And so these exceptions are quite narrow and not what is going to build generational wealth as you say or even save generational wealth. So right, the spouse, you might think of these things as like, "Okay, saving grace, at least the spouse can keep their home during their lifetime. A surviving child under age 21 is an exception or if the child is disabled or if the adult child has lived in the home for at least two years and been taking care of their parent, there's some exceptions." There's also some hardship waivers that, this is what they're called, where a surviving adult child could for instance, file a permission. Basically, asking permission for the state not to recover this estate and different states apply it in different ways.

Stephanie Altman (16:21):

But for instance, Illinois, before we just recently changed the law, which I know we'll talk about. Not a lot of people even knew they could, who knows they can file this hardship waiver and they may have to prove as an adult child that they would be in danger of using Medicaid and public benefits. So they have to prove that they're really low income if this house was a lien was produced on this house and it was sold. So it's a very cumbersome process to get through one of these exceptions and to even find out there is an exception.

Kee Tobar (16:57):

So just one also, just to break that down what I feel I heard you say is that, there's the spouse, if there is a child under 21 and under and if maybe you're over 21 but you were the caretaker of the owner of the home. So who's out of that space is, if I'm an adult child over 21 that did not take care, I wasn't in the home of my parent and so even though, so with the child, is it the life of the child or is it that the recovery goes away if you have a child 21 and under?

Stephanie Altman (17:46):

Yeah. I mean, these exceptions are quite complicated and are different in each state. So they have to follow a federal baseline and I'm almost reading them because it's so complicated. So you can just imagine that someone needs a lawyer to even figure them out. But even the one that you were just saying, this is how narrow it is. In the case of a former home of a Medicaid recipient, when an adult child has lived in the home for at least two years immediately before the deceased Medicaid recipient was institutionalized. So immediately before their parent went into the nursing home and the adult child has lived there continuously since that time. So they've lived there the whole time their parent's in the nursing home and can establish to the satisfaction of the state that he or she provided care that may have delayed their parents' admission into the nursing home. So I just read that just to show you how hard it is to even meet that exception, let alone, if you know what it is.

Kee Tobar (18:51):

If you were able to see me right now, you would see that I have a screw face on because that is... Who can jump through all of those hoops? That's a very specific set. And I'm wondering based on that, was there a context, you brought up 1993 because before 1993, we didn't have this Medicaid Estate Recovery. What is the context surrounding these rule, why did they come to be?

Stephanie Altman (19:21):

Yeah. So I read a little bit about the history of it as we were working on this law in Illinois. And again, I'm not this big historical expert on estate recovery. But from what I've read prior to 1993, there were states that by permission or option had their own estate recovery provisions. What changed in 1993 is that Congress made it mandatory for all states so Congress passed a law in 1993 that made estate recovery mandatory for every state. Now, there are some exceptions that are different in different states but every state is required to pursue estate recovery and that didn't exist before that. Less than half apparently, of states did pursue estate recovery prior to 1993 so it wasn't by any means all states. I believe it really did coincide with a period of history in which welfare reform and individual responsibility and really erroneous claims of welfare fraud dominated the political conversation.

Stephanie Altman (20:24):

And there were strong opponents apparently, in 1993 of Medicaid recoveries and argued the practice was unfair. It mainly affected people with very modest means and spared people who could actually, find a lawyer and get some advice on estate planning techniques and figure out how to game the system. It also really clashes with very broadly held cultural values on the sanctity of intergenerational legacies, being able to, as you said, provide some intergenerational wealth. But also a home is often something, it's not just the value of it, it could be the home your children grew up in, it could be the home in the neighborhood that you love. It often has other things than just the money that it's worth and not being able to keep it.

Stephanie Altman (21:18):

People argued that the threat of estate recovery causes people to forego services they need like long term care or care in their homes and it discourages people from seeking Medicaid even for an adult parent who's very ill or the parent themselves because they fear what it means if their children don't have any estate that they are left when they die. So all of those arguments apparently were made in 1993 and I think many of them came true. But I think we were in era then and maybe now of, as well of the stereotypes of, who uses Medicaid and who's on the public dollar and who is using our tax money and that we should somehow recover that from them and they should pay for it themselves, unfortunately.

Kee Tobar (22:15):

Right. And connected to that is worthiness, non worthiness. And the undercurrent of that for some is the race and class conversation here. And so I wasn't explicit when I was doing research about this, specifically what came up was West Virginia. And they took federal government to, they took this to court and they lost, of course. But they even stated that this was the betrayal of the new deal. And I was just like, people earlier on saw that this was going to affect poor people and because of the dynamics of this country as it relates to class and race.

Kee Tobar (22:59):

We also could have seen earlier on that this was going to disproportionately or disparately affect a low income people of color which is interesting when we think about the legacy of home ownership and the obstacles already in the front end of even obtaining a home and to think on the back end, you've done all this work to obtain a home, to obtain the American dream. And on the back end, it still may slip away from your... Not even slip away because I don't want to act as if it's passively taken away from, but it still may be taken away or confiscated from you. So what triggers Medicaid Estate Recovery?

Stephanie Altman (23:46):

So it's really, it's triggered by somebody using that type of care. So using institutional care like a nursing home and some... I've work with many clients and I'm sure you have too, it's not like a choice like, "Oh, I think I'll just use a nursing home." Often somebody is in very, very dire straits and they can't be cared for at home and they are really at, their most vulnerable. And we have people, clients I've worked with, they're in hospitals. Perhaps, they even need a nurse 24 hours a day or they can't be cared for even at home. They may need special equipment or constant monitoring and that could be from dementia, that could be from a physical illness, that could be from other things that affect people in older age. So the idea that, "Oh, nursing homes is a choice."

Stephanie Altman (24:49):

It really isn't the reality that I've seen. We would like, and I think everyone would like to be cared for in their home if possible. And there's been a movement over the last 40 years to try to do that and offer those options for people to be cared for in their home. But some people still do need to be in a nursing home. And what's the most egregious to me in some ways is that both kinds of care are subject to estate recovery. So not just if you have to go into a nursing home but also if you need to use what's called waiver services which are home community based services that are provided to you in lieu of a nursing home. So both those things would trigger in addition to other things, would trigger estate recovery.

Kee Tobar (25:36):

So we're talking about nursing home care or at home care, what type of hypothetical numbers are we talking about here so that we can just ground this with people? What is a possible estate bill that families may face?

Stephanie Altman (25:55):

Yeah. So people have to be fairly low income to be eligible for Medicaid in the first place. So we're often talking about an older adult that has income to be eligible for Medicaid under, let's say $1,200 a month and that's in higher income states. Sometimes it's lower even down to a thousand dollars a month, that's the income. We already talked about assets generally without exception, there's some exceptions but it can't be over $2,000 and assets completely. So that means $2,000 in the bank or $2,000 in something that you own. So it's very, very, very low income programs, I think people don't totally realize that.

Stephanie Altman (26:40):

And I believe there was a big report done by a federal quasi-governmental agency commission called MACPAC about Medicaid. And I believe the average estate was under $47,000 in equity. So we're not talking about in general, people having houses worth half a million dollars or even a hundred thousand dollars that they're passing on. In general, I believe the average was under, or average was $47,000 for the whole value of the estate which is extremely meaningful to a family whose income is as low as we're talking about. But I think that when the general public thinks about it, they think somehow they're sitting on a million dollars.

Kee Tobar (27:30):

Right. And so can we also talk about, what's the hypothetical bill though as it relates to what's the hypothetical estate value? But what's the hypothetical bill if you were in nursing home care for the last 10 years because you have dementia and you can't be serviced at home?

Stephanie Altman (27:52):

That's a really good question and I'm not sure I have the exact answer to because I think it differs. I believe in Illinois, a nursing home generally, costs if you were to pay for it out of pocket somewhere around $3,000 a month and that could be on the low end. So probably, at least $36,000 a year if not more over years and years. So I'm not sure exactly how much but most people cannot afford to pay for a nursing home out of pocket or their children can't. And I didn't know this before I did this work, Medicare doesn't cover nursing home coverage. So Medicare, the big Federal Health Insurance Program that almost every person over 65 has, has a big gaping hole. And that gaping hole is long-term care services.

Stephanie Altman (28:52):

And if a family doesn't have money to just pay out of pocket, Medicaid is their only option. Most people don't have long-term care insurance, long-term care insurance is costly and doesn't always cover everything or definitely, doesn't cover everything. And I think that long term care is the big missing piece for older adults and Medicaid is left to pick up the slack so it's very expensive. And if you're in a much higher cost need center, you're on a ventilator, things like that, it's probably, way upwards of that cost that I gave.

Kee Tobar (29:33):

And I wanted to explicitly talk about, we braked over this a bit earlier in the conversation. But to specifically talk about those race or race based stereotypes that may haven't had any connection to the creation of this program.

Stephanie Altman (29:46):

Right. I mean, I think historically, especially in the years of welfare reform, race based stereotypes of who uses Medicaid and who uses public programs really proliferated. I'm sure these stereotypes existed and proliferated way before welfare reform but I think they became very prevalent in both political parties during the 1990s. And the general public also contributed and led strong support to welfare reform even from the Democrats. There were a lot of politics that imposed huge restrictions for instance, on immigrants and immigrants getting public benefits which we're still fighting today. And in the United States, most immigrants and immigrants who would be subject to these really draconian type of rules that came out in 1993 and 94 are immigrants of color who are black and brown. And also it's not a coincidence the same estate recovery started at the same time.

Stephanie Altman (30:59):

So welfare reform, the end of aid to families will depend in children which was a program that ended up being capped, rules in welfare reform against immigrants, rules that stopped cash benefits after a certain number of children in a family. Extremely race based, very restrictive policies all came about during that same period of time. Not that it stopped, we still have quite a bit of new policies that are really restrictive, especially in the Trump administration. But that lack of long-term coverage in the Medicare program really put the emphasis on Medicaid as the last resort. And since families of color and lower income families are really the ones who bore the brunt of it, I don't think there's been the political power or the motivation to change that. And I think that's really been based on the stereotypes and the reality of who's on Medicaid.

Kee Tobar (32:03):

Right. So how is Medicaid participation impacted by a fear of the homeowner that their heir will lose their home if they participate in Medicaid? And the second part of that is, do you believe this was an intended consequence or consequence by design?

Stephanie Altman (32:21):

Yeah. That's a really good question. I mean, I've definitely counseled families over many, many years. I've done this since 1989 and certainly, since 1993 families and caregivers and especially, the professionals that advise them that many older adults and it's generally, the older adults. I think that there is this also erroneous stereotype that somehow their adult children are like, "Wait, I need this money and I'm not going to care for my parents in the best way that they need to be cared for." And I think that's also a stereotype and also completely wrong. Of all the clients I've talked to, it's really the older adult who fears not being able to leave something for their children. And I think the loss of their home, the loss of the thought that they wouldn't be able to do, I'm getting older so I think of that too.

Stephanie Altman (33:16):

I mean, one of the things that, and I have adult children, you want to take care of your kids and you want to pass on what you can pass on. And that's, I think a very strong feeling for everybody and especially for low income families or families of color who maybe were redlined, who couldn't get loans, who couldn't get mortgages, who couldn't buy the house themselves. And then to have it, like you said, on the back end and not be able to even pass along what they have been able to build out of, and against so many odds is just awful to me.

Kee Tobar (33:58):

Connected to that, just talk about historically, how has Medicaid Estate Recovery affected black and brown wealth accumulation because one of the ways that we are taught that we build wealth in this country is through the home?

Stephanie Altman (34:11):

Absolutely. And I think property is one of the major ways, I'm not a housing advocate. I certainly learned in the Shriver Center Racial Justice Institute, which I know you also were a graduate of, a lot about the racial structuralization and racism involved in home ownership and keeping people from owning homes, post world war II and especially, and the ways in which the federal government purposely and purposefully restricted people from being able to live in certain areas but also to be able to get loans and be able to buy homes and build that wealth. Estate recovery just exacerbates that and perpetuates that. And it really exacerbates the wealth disparities from recovering families who have homes. Again, I don't like to call them estates because it makes it... Estate, somehow to me sounds like it's a big million dollar home and it really removes from their enrollees and their heir such an important source of intergenerational family wealth. People of color make up almost 60% of Medicaid enrollees under age 65 and are disproportionately represented among dual eligibles.

Stephanie Altman (35:31):

So dual eligibles are people who are low income even after age 65 and they have Medicare but since Medicare doesn't cover everything, they can also have Medicaid. They can't necessarily afford that insurance policy to cover everything they have to, they have to have Medicaid to be able to cover some of those things like long-term care. And so people of color make up a disproportionate share of those populations and especially, dual eligibles. And that's the group that's most affected by estate recovery so it's a bunch of different things at the same time. So this report that was done and actually, by the federal commission, the MACPAC, indicated that the net wealth and home equity of older Medicaid decedent has generally been quite low.

Stephanie Altman (36:21):

And as I said, the average home equity was 27,000 and the net wealth average, roughly $47,000. And we're not talking about tremendous amount of money and as you pointed out, you go through that very fast in a nursing home. And three quarters of the beneficiaries had wealth less than $48,000 after their death. And the data really showed that this estate recovery falls hardest on those in the report that they deemed beneficiaries of modest means which disproportionately were beneficiaries of color.

Kee Tobar (36:57):

Right. So again, we're not talking about people leaving big grand estates, we're talking about people leaving modest single family homes. And just thinking about in this particular environment, housing environment, the ability to have a home and to not have to pay exorbitant rent or for those who are locked out of even a home ownership at this current time. Having that family home could have could be very helpful, it's the lifeline, that is the wealth. There's no extra wealth coming from it but that the ability to have a place is simply just, that is a family home for you to stay is the wealth. But aside from that, we're talking about how that affects the individual and the individual family. But as I was doing research as it relates to this, there is also the macro impact of how it affects communities.

Kee Tobar (37:53):

So if you're having these estate recoveries and that could cause homelessness. So this is the family home, I no longer have a family home and so now, and especially during this time, where do I have to live? I can't afford to live in certain places, I can't afford to actually, enter the market. But also as it relates to just the macro community blight and abandonment in these communities. And so it's not just how it impacts the family and the singular individual or the family and the siblings and the heirs, is how estate recovery also has a negative impact on poor or low income neighborhoods. So the state coming after, like my singular home has an effect on everyone on this block. And I think it was important to say that as we think about how these policies historically affect black and brown people.

Kee Tobar (39:01):

It's not affecting black and brown individuals solely, it's also affecting black and brown communities which actually, has an impact. If you happen to own your home on the block, if this is a abandoned a house or a blighted house on the block, that's negatively affecting the value of your home. So I just also wanted to make sure that I have put that conversation out there too. And so we've talked about a lot of the issues as it relates to Medicaid Estate Recovery but what are some potential solutions to achieve the goals of the program, but also help to sustain home ownership for heirs?

Stephanie Altman (39:40):

Absolutely. So I mean, one of the things that can help stop this maybe completely would be for Medicare to actually, cover long-term care services and supports. And I know some of people in Congress have proposed it and presidential candidates have proposed it but it is the one big missing piece from Medicare. And Medicare was designed to make sure, starting in the 1960s that people over 65 weren't impoverished by their medical needs. And this is the failure of Medicare to cover long-term care services and supports, nursing home and home care, is really the tragedy still of our times. And the fact that we are letting older adults and their families become impoverished in order just to get the care that they need. So number one, I would say Medicare covering long-term care services and supports is my pie in the sky.

Stephanie Altman (40:45):

Also, removing estate recovery from Medicaid, removing it completely. Those two things would be what we need to bring some equity, both for race and income to our seniors. Honestly, there are other solutions to do in the meantime, we always need the in the meantime. We're not going to get to universal coverage tomorrow. So what do we do in the meantime? So MACPAC, this Medicaid commission that really looked at promoting equity in the programs, came up with some solutions at the federal level. They recommended making Medicaid Estate Recovery optional again for states so that every state didn't have to do so, having minimum standards for hardship waivers. So across the board in every state, people could apply, families could apply for a waiver so their estate wasn't recovered, allowing or telling states that they could not pursue recovery for an asset that is SALT income producing asset.

Stephanie Altman (41:49):

So sometimes there are houses that people are renting out and that is, or an apartment that people are renting out. And that is an income producing asset for the survivor, homes of modest value or any estate valued under a certain threshold. So those are the things that MACPAC, this commission recommended. And in Illinois, we just passed a lot. Actually, it was signed Friday at 5 o'clock, that helps to do some of these things. So what we did in Illinois is try to take those MACPAC, I love that word, those Medicaid commission recommendations and do what we could with our state law. So there's only so much states can do but there are a lot of changes that states can pursue while we're waiting for the federal government to take action. So Illinois passed this law, it's called House Bill 43, 43 and now it's been signed into law as of Friday.

Stephanie Altman (42:48):

So one thing it did that was really important is, it ends liens on a nursing home residence home while they're still alive. So liens are not federally mandated and I'm not a big expert on liens but a lien when you put it on a nursing home residents home, it's more likely that after they die that lien will be exercised by the state and be able to actually, take the home and sell it afterwards. So one thing is, it ends liens so that estate recovery can only start after the person dies so nothing before. And then another really important thing is Illinois agreed in this, or the law that requires that Illinois will not pursue the first $25,000 of an estate. So it's a cost effectiveness threshold basically saying at first, it's not just if estate's under 25,000, it's the first 25,000. So at least the first $25,000 of a decedent estate will pass some amount of wealth.

Stephanie Altman (43:58):

And as we heard most houses, average house equity was 27,000 and average estate altogether was 47,000 so that means or median. So that means 50% of those estates are way below $25,000 and so that could be passed on. And then also, it did some things to expand hardship waivers and the requirements that people could apply for hardship waivers and to make sure that people are aware of hardship waivers so that the families can apply for them.

Stephanie Altman (44:31):

So it makes some very good changes to the Illinois law. It doesn't get to what we want to get to, which is get rid of estate recovery altogether, and which we can only do at the federal level, and have Medicare actually, cover long-term care services and supports. But it's going to go a long way, we think, in Illinois to reduce the number of estates and that are recovered and we're going to be studying that to see. But we think it will reduce a lot of estate recovery in the years to come and while we're waiting for the federal changes, it will allow passage of some generational wealth to begin to build back what people have lost.

Kee Tobar (45:21):

I'm so happy to hear that this past, and specifically really happy to hear that was put into it, this idea to invest more so into the awareness of Medicaid Estate Recovery and Medicaid Estate Recovery waivers. Because although, this may seem like a technical conversation that we've been having about a smaller program, none of us are disqualified from medical emergencies. We all have the potential to have medical emergencies and when you add the racialized, the societal disparities in healthcare and healthcare inequities, some of us are more predisposed to potential to having healthcare catastrophes. And so it's really important as we think about right now, some of us may be young and lively or younger. We're not at this state where we are in Medicare as we're striving to get this home ownership but it's really important to think about the future and how there's...

Kee Tobar (46:38):

There are large swaths of people in this country who may have to receive at home care services. My brother had to receive at home care service. I know various folks from my community who had to receive at home care services or who were in nursing homes at the end of their life. And we don't want all of the struggle and like we said, there are many people who have to overcome so many obstacles to live this American dream, to buy that home for it to be in vain. And so thank you so much, Stephanie, for having this conversation and providing your insights and sharing this information. And I hope that you have a great rest of your day. And I hope that those who are listening learned something today because I know that I sure did.

Stephanie Altman (47:21):

Thank you so much for inviting us.

Kee Tobar (47:29):

So that wraps up my conversation with Stephanie Altman director of Healthcare Justice and senior director of Policy at the Shriver Center on Poverty Law. I want to thank Stephanie Altman for sharing her knowledge on the intersections of healthcare and housing. The conversation once again, highlighted how accomplishing the American dream for many has less to do with individual choices and responsibilities than navigating exploitive policy. If you want to know more about Stephanie's work, you can follow her on Twitter @StephanieAltma2, that's S-T-E-P-H-A-N-I-E-A-L-T-M-A-2. You can also check out the Shriver Center at Next week, we'll launch our discussion on race, utilities and the law called Utilities, will black and brown people survive the new America? The first conversation will be with my colleague Kintéshia Scott, who is a staff attorney in the Energy Unit at Community Legal Services. Also, joining us is Bishop Dwayne Royster, the executive director and an organizer with Power and Interfaith Multi-Racial Grassroots organization.

Kee Tobar (48:35):

Be sure to subscribe to How Is That Legal wherever you get your podcast. How Is That Legal was produced by Rowhome Productions, Jake Nussbaum is our producer and editor, executive producers are Alex Lewis and John Myers. A special thanks to Caitlin Nagel and Zakya Hall and Molly Pollak. Music provided by Blue Dot Sessions. I'm your host Kee Tobar. Thank you so much for joining us.