The Worst Law for Seniors Is Introduced Through Pennsylvania Budget
Just in time for Mothers’ Day and Fathers’ Day, a member of the Pennsylvania State Legislature has introduced for passage a bill that would likely be the worst law yet affecting frail senior Mothers and Fathers, their families and business associates. The threat is real and immediate. Hidden in Budget Legislation on the 35th page of a 57 page House Bill, it is not surprising that the stealth Section of the Bill has not attracted much attention. It should and something can be done. More of that later.
Representative Dwight Evans of Philadelphia, the Chair of the House Appropriations Committee, sponsored House Bill 1351 which covers multiple subjects from child welfare through federal funding. Section 1412 is the problem.
Section 1412 of HB 1351 would, if adopted, put Pennsylvania on the short list of states practicing what is known as “Expanded Estate Recovery” under Medicaid. Anyone who believes that Medicaid only affects older relatives should read further.
The Current Law and the Proposed Change. Pennsylvania now has estate recovery for Medicaid recipients over age 55 and in a nursing home or receiving Medicaid waiver services at home but limited to the probate estate. If a nursing home resident who receives Medicaid dies, the government bills against those assets that are still in her name at the time of her death. Often this means claiming against a small bank account, remaining balance in a burial reserve, and sometimes, if it is still in the deceased’s name, a residence.
The new law would go much farther even, in some cases, ignoring that the deceased no longer owned the asset. The law would hit spouses hard and it is intended to hit spouses. Section 1412(2) references tenancy by the entireties, an ownership only between husband and wife. There is more.
Any property considered exempt when applying for Medicaid would now be considered fair game after the Medicaid recipient dies. There would be no limitation of a five year lookback when considering estate recovery.
Family Businesses. One of the exemptions from Medicaid at time of application is property “used in a trade or business.” Businesses where a parent or grandparent holds an interest either holding corporate shares or acting as partner could find the government as an unexpected partner or creditor. Since nursing home costs average close to $100,000 per year in this area of Pennsylvania, the claim could be sizeable.
Farms. If the family farm is held as tenants by the entireties, on the first spouse’s death in the nursing home, the government would intend to lien the property for the amount of the bill or up to one-half the value of the property. Even if there is no execution on the lien during the life of the surviving spouse, and there cannot legally be under federal law, this leaves the surviving spouse with very little for repairs or living expenses.
Bank Accounts. The government would claim for the proportionate share against joint bank accounts and joint property of any kind.
Other Assets. Other assets affected include life estate property even though the federal government has specific rules allowing purchase of a life estate on real estate, and property held in trust.
The legislation we understand is based on Expanded Estate Recovery in Ohio, HB 66, passed June 30, 2005. For years now I have listened to elder law attorneys from Ohio at national conferences.
The consensus has been that Ohio is one of the worst states in the country for seniors to the extent that residents openly discuss divorce for elders needing care or moving out of the state.
One state backtracked. Massachusetts adopted legislation for Expanded Estate Recovery in July, 2003. An admitted disaster, the legislature later delayed implementation in 2004 and then repealed the law even over the governor’s veto.
This is what you can do. Write your own letter or copy this column and send it with your comments to your State Senator and State Representative. Names and the Bill are found at www.legis.state.Pa.us. For the Bill, click “Bill” in the upper box, enter HB1351 and read Section 1412 beginning on page 35.
If told that Pennsylvania needs Expanded Estate Recovery, remind them that the same HB1351 authorizes the Department of Public Welfare to accept the $4.07 billion in funds earmarked by the federal government specifically for Pennsylvania Medicaid, the fifth highest in the nation. Also, no estate recovery program, even with aggressive Expanded Estate Recovery and despite pain to the family has ever netted a State as much as $30 million which is less than 1/3 of one percent of the Pennsylvania budget for Medicaid.
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.