Nearly two years after her father’s death in 2016, Sandy LoGrande received a letter from MassHealth that left her stunned.
It demanded $177,000 from the estate of her father, Salvatore “Sam” LoGrande, for Medicaid expenses he incurred during his battle with prostate cancer. LoGrande and her younger sister, Laurie LoGrande, didn’t have that kind of money. Their only option, she said, would be to sell the single-family Colonial in Gloucester their father bought in 1976. It was part of their inheritance, and LoGrande has continued living there since her father’s death.
“I can’t believe that an organization that’s supposed to help people get a leg up is doing this,” LoGrande remembered thinking.
Under federal law, state Medicaid programs are required to seek reimbursements for some Medicaid expenses from the estates of the deceased, but MassHealth has one of the more aggressive approaches in the country. There’s no limit on how much Massachusetts can try to recoup, and for some the bill can total hundreds of thousands of dollars — effectively draining the estates of many families.
Now, the Blue Cross Blue Shield of Massachusetts Foundation and a consultancy that specializes in health care policy, the Aurrera Health Group, are calling out Massachusetts for its aggressive practices, arguing in a report issued last week that they unduly burden poorer families and rob them of the opportunity to build intergenerational wealth.
“The emotional and financial consequences for the low-income families involved can be really devastating,” said Katherine Howitt, director of the Massachusetts Medicaid Policy Institute, an independent policy organization that is part of the Blue Cross Blue Shield of Massachusetts Foundation.
Federal law does require states to seek recovery of Medicaid expenses, specifically for long-term care or services provided to people 55 or older, including those who lived at home, as well as people of any age who permanently lived in a long-term care or medical facility.
Massachusetts goes even further: for that same population it seeks to recover, with some exceptions, every Medicaid expense incurred, not just those related to long-term care. That can include preventative procedures and care for chronic conditions. It is one of 23 states with estate-recovery policies that exceed federal requirements, according to the foundation report.
Still, only a fraction of MassHealth’s more than 2 million members are subject to estate recovery after death, largely because so few have eligible assets such as homes, cars, and money in the bank. A 2021 review from the Office of the State Auditor found MassHealth recovered Medicaid expenses from 3,440 estates from July 2016 to December 2018. Subsequent changes have likely reduced that number even further. But for those affected, a home may be the most valuable thing they can leave for their heirs.
“We know that homes are really a key source of intergenerational family wealth,” Howitt said.
In Massachusetts and many other states, other conditions, such as joint property ownership, can also exempt homes from being counted by Medicaid as an asset eligible for recovery, further reducing the number of members affected, said Victoria Pulos, senior staff attorney at the Massachusetts Law Reform Institute and a contributor to the recent report. Others can afford estate lawyers who can provide strategies for sheltering assets.
Policy analysts and a state legislator say that even changes introduced in 2021 to exempt estates below certain amounts and expand eligibility for waivers did not go far enough to help low-income families.
The report from the foundation and Aurrera looked to other states’ approaches to estate recovery. Its recommendations included waivers for property that is survivors’ sole income-producing asset, making it easier for a person’s caregiver to obtain exemptions, and exempting $25,000 from every estate eligible for recovery.
“MassHealth’s estate-recovery policy is unfair, unnecessary, and perpetuates inequity,” said state Senator Joanne Comerford, a Northampton Democrat who is sponsoring a bill that would further limit how much MassHealth can cull.
In its statement, MassHealth said it would consider the report’s recommendations.
“MassHealth, in its administration of the estate recovery program, seeks to prevent undue hardship for members and their families, promote intergenerational transfers of wealth for financially vulnerable heirs, and increase awareness about estate recovery requirements,” the statement said.
Four years before her father’s death, LoGrande faced her own surgery and needed help with housekeeping while she recovered. She was wary of enrolling her father in Medicaid because she had heard that after his death the state could put a lien on his home for Medicaid expenses.
“My dad was so psyched he could leave his girls the home,” she said.
Her concerns were eased, she said, when a representative from a home assistance program told her that her father’s estate wouldn’t be vulnerable as long as he didn’t go to a nursing home.
That was incorrect.
After Sam LoGrande’s death, his daughter, who said she is also now a MassHealth member and on disability due to Crohn’s disease, which at times causes an intense form of arthritis that makes it difficult for her to work, fought to get an itemized invoice of the Medicaid expenses but failed. During the time he was on Medicaid, he received few services, including coverage for very limited assistance at home and one hospitalization, she said. The most detail MassHealth provided on the $177,000 demand was information about the cost of insurance premiums, LoGrande said.
The 2021 reforms exempted estates worth $25,000 or less and introduced additional waivers, and combined, are expected to halve the amount the state collects through estate recovery, from more than $47 million in 2019 to an anticipated $23.5 million.
Before those changes, Massachusetts gathered more from members’ estates than any other state.
Another important change, Howitt said, was an added emphasis on ensuring Medicaid recipients were aware of the possibility of estate recovery. As LoGrande experienced, claims from MassHealth could come as a shock in the aftermath of a relative’s death.
Comerford’s bill, currently in the Senate Ways and Means Committee, would go further than the 2021 changes, including limiting MassHealth’s recovery policies to match federal standards, exempting estates with homes of modest value, and limiting recovery on insurance premiums that exceeded the cost of Medicaid expenses.
“It’s time to end this state policy that forces low-income families to sell their homes to repay the state for lawful benefits,” Comerford said.
The revenue lost to any additional changes would have minimal impact on MassHealth’s services, Howitt said. The state keeps only about half of what it recovers, with the rest reimbursing the federal government. The loss of revenue from the 2021 changes hasn’t directly affected MassHealth, the state said, since the money collected through estate recovery instead goes into the general fund, which finances a wide assortment of services.
LoGrande and her younger sister fought MassHealth in court, and two years later reached a settlement that exempted them from paying the Medicaid expenses. They kept their father’s home, and are now planning to sell it and share the profits.
“It literally is everything,” LoGrande said. “Had we not won this we basically would have ended up on the street or really scrambling.”
Jason Laughlin can be reached at jason.laughlin@globe.com. Follow him @jasmlaughlin.
