Obamacare means you need to do Estate Planning to keep your assets

As Sandhya Somashekhar of the Washington Post pointed out on January 23^rd, if your health insurance is through Medicaid, in certain states, including Maryland, the government can recoup its medical costs (including premium subsidies to low-income citizens) by putting a lien on your property and collecting it from your probate Estate after you die. The Maryland regulation defining when Maryland can lien your property is COMAR (Code of Maryland Regulation) 10.09.24.08.24.15 A-3. “Regulations and Recoveries.” In Maryland these “payback” claims include recipients of “community” Medicaid who received benefits after they were age 55.

As a practical matter this means that the house you wanted to pass on to your children may instead have to be sold to repay the government for any money that it paid for your medical care or which it gave you as an subsidy to lower the cost of your insurance premium.

Under the 1993 changes to Medicaid the states have the option of recovering the benefits you received for routine medical care. The argument being that if the government gave you a benefit you should pay it back if you are able.

As the Washington Post points out, one perceived problem with the new law is that the people who qualify for Obamacare’s expanded Medicaid coverage must enroll in Medicaid. These people do not have the option of getting a tax subsidy to purchase insurance on the open market. In essence, if you earn less than $45,960 per year you have to accept Medicaid coverage and the potential that the government will seize your assets after death. Someone who earns more than$45,960.00 can get a tax subsidy, buy insurance on the open market, and not worry about the government seizing their assets after death.

The practical take-away from the implementation of Obamacare is that Estate planning may be more important than ever. The new law may have financial consequences for you and your family that won’t be seen until after you die. Proper planning can make sure that you and your family have both health insurance and the ability to pass on family assets after death.