Bad Policy

October 21, 2011

I’ve got some bad news for you. The State of Michigan, propelled by the Federal Government, is now placing liens on the homes of people in nursing homes who receive Medicaid. A couple of months ago the Michigan Department of Community Health sent out notices to people receiving Medicaid that if they die their property will have a lien on it to repay the state for their care.

Like virtually all laws the State passes, this new lien law is a product of the Federal government. Much of “local government” even on the state level is a myth. States ask the Federal government for money and they get it, but only if they pass as state laws what the Feds want. That’s where many of your traffic laws come from. The state, unable to resist money of any kind, takes Transportation funds and in return passes traffic laws that lobbyists in Washington want. It’s the system. I will say this, Michigan held out the longest of any state before caving to the Hope and Change people, but that doesn’t excuse what politicians in Lansing have done to the elderly with this lien law.

In a nutshell the law [MCL 400.112g for those who care], places a lien on the property of medicaid recipients if they began to draw Medicaid benefits after September 30, 2007.  Because of the enormous expense of nursing homes approximately 50% of nursing home residents have their bill paid for Medicaid.

Medicaid is means tested welfare, as opposed to Medicare, which is a medical benefit paid through Social Security and the participant. To get Medicaid you have to be officially “poor.” If you’re not “poor” when you go into a nursing home, you soon will be. That’s when Medicaid kicks in and that’s when the government liens your property.

So what we have are old folks who have to “spend down” until they’re nearly broke in order to qualify for Medicaid. If they aren’t broke than they have to pay the nursing home till they are. That takes less time than an Obama speech.

Experience from the other 49 states indicates that leining the last asset that some elderly person in a nursing home has recovers about 1% of the money spent on Medicaid. Wow, 1%.

What’s the cost of this program? Well, to old people trying to hang on to a last shred of dignity, placing a lien on their homes is devastating. The last thing they were allowed to own is now in hock to the State of Michigan.  Kids with parents in nursing homes, or about to go into nursing homes, will have to face some tough choices. Sell a parents home, and disqualify them for Medicaid for 5 years til the moneys gone, or let them go into the nursing home and eventually wind up with a house on their hands that they may not be able to sell and pay off the lien. With real estate already depressed I suspect that many heirs are simply going to walk away from that property and let the State have it.

Good economic move Michigan. Just what we need; more abandoned houses.

There are exceptions and ways around some of the harsher parts of this law. It’s tricky and calls for some detailed knowledge of real estate law and estate planning, but it can be done. It isn’t something for amateurs.

Finally, politicians from my party, the Republicans, are trying to make things even harder on old people. Not satisfied with the misery and worry this law is going to cause, Senator Roger Kahn, R-Saginaw Twp.

Has sponsored a Senate Bill [404-406] that makes even more people liable for these liens and cuts out some of the hardship exceptions. Just what constituency  he hopes to please by dumping even harder on the people that fought World War II and Korea I can’t figure out. I don’t think this is much of a vote getter, do you?

Hopefully, Senate Bill 404-406 will die on the vine. It should. Republicans always have to fight accusations of being cold and unfeeling toward people in need, and having their fingerprints on a law that makes a bad situation worse, is inexcusable. If you want to let your State Senator Michelle McManus know how you feel you can call her at 517-373-1725. You might tell our State Representative Joel Johnson [from Clare by the way-phone 517-373-8962] that if this bill reaches the House you hope he does his best to see it fail.

Getting old is hard. Having to go into a nursing home is worse. Old people are easily frightened by things like liens. Being broke after a life of self sufficiency tears the hearts out of elderly people. Knowing they own their own home allows them to cling to the hope that someday they’ll return and gives them the knowledge they’ll have something to leave to their families. Placing liens on these people’s homes is heartless and economically foolish. We can find that 1% somewhere besides squeezing the elderly and their families.

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