Good news and bad news reported on state budget negotiations
After my two previous columns on problems for seniors with the proposed Pennsylvania budget, see “The Worst Law For Seniors Is Introduced Through Pennsylvania Budget,” May 11, 2009, www.collitonlaw.com/09/051109/htm, and “Danger Ahead? An Update On Expanded Estate Recovery in Pennsylvania,” June 1, 2009, www.collitonlaw.com/09/060109/htm, there is both good news and bad news to report.
First, for the good news. Seniors and their families are being heard on this proposed law. Several readers called in to my office asking what more can be done. What they are doing now as they contact their local members of the state legislature is helping a great deal as legislators are stating that they understand the problem and will not support HB 1351, Section 1412. While the budget is not yet passed and anything can happen, progress is definitely being made.
As background, the offending bill is part of Gov. Ed Rendell’s budget and was introduced by Rep. Dwight Evans, D-Philadelphia, chairman of the House Appropriations Committee. If adopted, it would, among other things, place a lien on homes of widows and widowers of Medicaid recipients up to one half of the value of the home. It would also affect children owning property with their parents, family farms and businesses, and the marketability of titles to real estate and other jointly titled property.
Readers should know that they are in good company in opposing this bill. Joining the coalition against it now are the Pennsylvania Bar Association including PABAR-PAC, Pennsylvania Association of Elder Law Attorneys (PAELA), AARP Pennsylvania Chapter, Insurance Federation of Pennsylvania, Pennsylvania Bankers Association, Pennsylvania Land Title Association, Pennsylvania Alzheimer’s Public Policy Coalition, and Pennsylvania Home Care Association, among others.
The good news so far is on HB 1351, Section 1412. The potentially bad news is that there is more legislation. This one, House Bill 68, has already passed the House of Representatives by a large margin and is now in the Senate Judiciary Committee. Stewart Greenleaf of Montgomery County is chairman of the Senate Judiciary Committee. HB 68 also was introduced in connection with the budget but by a group of state representatives, none of them local to Chester County.
Here is what it would do. Note that it would apply to
everyone and not just Medicaid recipients or their families.
When the owner of a bank checking account, savings, or credit account, or CDs of $15,000 or less dies and the owner was over age 55 at the time of his death, his estate or heirs must present a letter from the Department of Public Welfare stating that the department has no claim against the funds. If the estate or heirs cannot produce such a letter, then the bank must distribute the first $3,500 in the account to the funeral director who conducted the funeral provided he furnishes a bill of at least that amount and then pay the entire balance of the account to the Pennsylvania Department of Public Welfare. There is no procedure described by which the estate or the heirs could get their money back.
HB 68 is about as close to confiscating bank accounts and giving them to the commonwealth as I have ever seen. The fact that it has gotten this far is amazing. Note that it assumes, unless the estate can prove differently, that everyone in Pennsylvania over the age of 55 was on Medicaid and owes the commonwealth money. Also note that the Pennsylvania Department of Public Welfare alone decides whether it will make a claim and for how much. There is no appeal procedure named, and no court looks over the department’s shoulder. There is no provision for notice to the estate or to the heirs and, if enacted, it would require the banks to turn over the money to the government. The funeral director would be limited to the first $3,500 in the account regardless how much the funeral actually cost.
Based on my experience, it would be fair to say that the majority of account owners own at least one bank account, which I refer to as an “in and out” account from which they pay bills that would have a balance on death of $15,000 or less. HB 68, like expanded estate recovery, would not even save the commonwealth money as the commonwealth adds to an already top-heavy bureaucracy.
To read more, go to the bill at www.legis.state.pa.us and enter HB 68. Continue to contact your legislators, because you can make a difference.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.