MADISON, Wis. (AP) — Newly granted powers that allow Gov. Scott Walker’s administration to recover assets from the estates of people who were on Medicaid may be getting scaled back.
The Legislature’s budget committee was scheduled to discuss Wednesday making changes to the estate-recovery provisions that were approved as a part of the state budget Walker signed into law this summer.
Federal law requires every state to have an estate recovery program to reclaim Medicaid money spent on long-term care, but the Legislature in this year’s budget greatly expanded what could be taken back in Wisconsin.
State health department officials have defended the changes, saying they create a more fair system where state taxpayers don’t have to foot the bill for someone’s long-term care only to have them pass their assets down to others upon their death.
But elder law attorneys and other critics have said the changes could lead to some elderly people getting divorced or make it more difficult for children to inherit the family farm, business or property.
The state has been mostly limited to going after property in a person’s probate estate. But now all property the person had an interest in at death, including property held in trust, would be eligible to be reclaimed.
The new provisions also greatly expand what the state can reclaim after a surviving spouse of a Medicaid recipient dies. Under one change, the state can recover all property of the Medicaid recipient that is included in the estate of the surviving spouse upon that person’s death.
The changes also limit the ability of surviving spouses to transfer assets, like a farm, business, automobile or other property, to their children at less than market value.
All of the changes were expected to save the state $4.3 million this year and $6.3 million next year. And, state health department officials warned that if the entire program is done away with the state would lose $12.5 million this year that it already recovers from Medicaid recipients who receive long-term care services.
But critics have raised concerns that some of the changes violate federal law. A memo distributed to the budget committee from the Legislative Fiscal Bureau and Legislative Council also cautioned that the changes might conflict with federal law in three ways, including broadening the definition of assets that the state could seek for repayment.
The Joint Finance Committee, comprised of 12 Republicans and four Democrats, was scheduled to consider a number of possible changes to the estate recovery provisions at its Wednesday meeting. The committee’s approval of the expanded recovery program is required before it can be implemented in October.