Iowa Medicaid Sends $4M Bills to Grieving Families
Collection agents working for the state of Iowa have recently sent out letters, demanding millions of dollars from the estates of individuals with disabilities who passed away after residing in a state institution for most of their lives. These bills represent the amount spent by Medicaid to cover the care of these residents while they lived at the Glenwood Resource Center, a state-run facility that closed its doors last summer. This practice of Medicaid estate recovery is a federal requirement, compelling states to pursue repayment after certain Medicaid recipients pass away. The intention behind this process is to prompt individuals to utilize their personal resources before turning to public programs for assistance.
Joy Higgins, a resident of Council Bluffs, was taken aback when she received a letter mere weeks after her 41-year-old daughter, Kristin, passed away in May. The letter, emblazoned with the logo of the Iowa Department of Health and Human Services, expressed condolences over the demise of Kristin Higgins. However, it also outlined the family’s obligation to remit $4,263,148.67 to Medicaid from any assets left behind by Kristin. This unexpected and massive bill left Joy Higgins questioning the motives behind such aggressive collection tactics, especially towards families who are already grappling with the loss of a loved one.
Kristin Higgins had minimal income due to a severe developmental disability resulting from a premature birth. Her sole earnings consisted of a Social Security disability benefit of $1,105 per month, most of which was allocated to the state institution where she resided for over three decades. Upon Kristin’s passing, the family utilized the small amount left in her personal account to cover her funeral expenses, leaving nothing for the state to recover. Despite the fact that the Higgins family did not have to pay the Medicaid bill, receiving the letter was emotionally jarring for them.
Witnessing similar attempts to collect from other families, including that of Eric Tomlyn, who passed away in 2020 at the age of 29 after spending a significant portion of his life at the Glenwood Resource Center, shed light on the widespread impact of these practices. Eric Tomlyn’s family found themselves facing a Medicaid bill exceeding $4.2 million after his death. Susan Tomlyn, Eric’s mother, vividly recalls her shock upon receiving this exorbitant bill. After providing documentation that the remaining balance in Eric’s personal account went towards his funeral expenses, the family did not hear anything further about the bill.
Supporters of Medicaid estate recovery efforts maintain that these rules serve to encourage individuals to finance their own care before resorting to Medicaid, which primarily serves those with limited financial means. However, critics argue that such recovery programs often disproportionately affect families with fewer resources. Wealthier families typically have the means to structure their estates in ways that circumvent Medicaid repayment obligations. The aggressive approach taken by certain states, such as Iowa, in pursuing these collections has raised concerns at the national level.
## Families Grappling with Medicaid Debt
The human impact of these collection efforts is palpable, as families already reeling from the loss of a loved one find themselves faced with astronomical bills to settle Medicaid debts. These demands, while unlikely to yield any financial gain, can trigger significant anxiety and distress among survivors. Eric Carlson, an attorney for the national group Justice in Aging, highlighted the potential repercussions of ignoring such bills. He advised recipients to respond promptly with documentation demonstrating the inability of their loved one’s estate to repay the Medicaid debt, cautioning that failure to address the bill could lead to further collection attempts that jeopardize family finances or assets.
## Congressional Efforts and State Responses
In light of the mounting concerns surrounding Medicaid estate recovery practices, efforts have been made to limit the scope of these programs. Massachusetts recently voted to significantly curtail its estate recovery program, marking a reduction in one of the nation’s most aggressive Medicaid clawback initiatives. Rep. Jan Schakowsky, a vocal advocate for reform, has introduced bills aimed at eliminating the federal mandate for states to recoup Medicaid funds from recipients’ estates. While bipartisan support for these measures remains elusive, the impact on families grappling with substantial Medicaid debts underscores the urgency of revisiting these policies.
The complexities of Medicaid estate recovery underscore the delicate balance between ensuring fiscal responsibility and protecting vulnerable families from undue financial burdens. As the debate over these practices continues, the human stories woven into the fabric of these policies serve as poignant reminders of the far-reaching implications of Medicaid debt collection. In an evolving landscape of healthcare financing, striking a harmonious balance between fiscal prudence and compassionate support for those in need remains a formidable challenge.
