[Congressional Record Volume 147, Number 33 (Tuesday, March 13, 2001)]
[Extensions of Remarks]
[Page E345]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           INTRODUCING THE MEDICAID ESTATE RECOVERY AMENDMENT

                                 ______
                                 

                         HON. NICK J. RAHALL II

                            of west virginia

                    in the house of representatives

                        Tuesday, March 13, 2001

  Mr. RAHALL. Mr. Speaker, today I introduce an amendment to the 
Medicaid Estate Recovery Act, that will restore the discretion of the 
states to decline to participate in the Medicaid Estate Recovery 
Program.
  More than three decades ago, the Medicaid program was enacted and 
implemented throughout the States with a mission of bringing relief to 
the poor, with an emphasis on children and the frail elderly, which 
included long-term or nursing home care for those who could not afford 
it.
  When the Estate Recovery program was instituted, it was at the 
discretion of the states as to whether they would participate in the 
recovery of medicaid costs for the care of indigent elderly and 
disabled persons through the sale of their homes.
  Among others, the State of West Virginia had declined to participate 
in a program that would take the homes of persons, just because they 
were extremely ill and because they were too poor to pay the costs of 
long term or nursing home care.
  But in 1993 that discretion among the states was taken away, and in 
its place there was a state mandate to participate in Medicaid estate 
recovery efforts as a condition of federal Medicaid funding. West 
Virginia reluctantly enacted a State law that would permit the selling 
of the homes for elderly victims who died while in the care of 
Medicaid-funded nursing care. The State did so only after HCFA advised 
them in no uncertain terms that if they did not they would lose part or 
all of the State's Medicaid funding.
  As a result of the government's mandate, my State enacted the law 
that would allow the State to practice estate recovery against helpless 
home owners who happened to be too poor to pay for their own end-of-
life care. In protest, the State law as enacted directed West 
Virginia's State Attorney General to file a lawsuit in federal court, 
claiming that the mandatory selling of people's homes was a violation 
of the 10th Amendment of the Constitution. The State's lawsuit is still 
pending.
  That was eight years ago, and no relief is in sight. That is why I 
have introduced my bill today, that would restore to the states their 
own discretion as to whether they will participate in estate recovery. 
Under my legislation, those states that wish to continue to sell the 
homes of the elderly in order to recover the medicaid costs of their 
end-of-life care, may continue to do so. But for West Virginia (and 
three other states who have steadfastly declined to ever implement an 
estate recovery program: Michigan, Georgia and Texas), it will have the 
discretion it had prior to the 1993 amendment to the Medicaid Act not 
to do so.
  As stated above, the original purpose of the Medicaid program was to 
provide funding to the states to furnish medical assistance to 
vulnerable populations with inadequate resources. There was no 
indication then that states would later be required to collect monies 
from the estates of the very same persons who were deemed by federal 
law to be vulnerable as to require medical assistance.
  I would like to give my colleagues one example of the disparity 
between poor and more affluent states when it comes to winning or 
losing under the estate recovery program.
  Estate recovery in a State which has a 50 percent federal matching 
share of Medicaid funds (FMAP), and which state recovered $2.5 million 
in a given year, that state would be able to keep $1.075 million in 
estate recovery funds for its own use. In a poorer state, like West 
Virginia, with a federal matching share of Medicaid funding (FMAP) of 
75 percent, it would have been able to retain no more than $425,000 in 
estate recovery monies for its own use (West Virginia returns 75 
percent of recovered funds to the Federal treasury, and pays 19.6 
percent to a collection agency to carry out the estate recovery actions 
against the estates of persons who died while receiving Medicaid funded 
long term care. In other words the poorest states receiving the highest 
Federal matching shares under Medicaid receive the least benefit from 
estate recovery, and they return the most money to the federal 
treasury. This disparity results in the reversal of the direction of 
transfer payments on which the Medicaid program is based. In simpler 
terms, estate recovery subsidizes the better-off state with the assets 
of those residing in the poorest states.
  I urge my colleagues to support this legislation restoring to the 
states the discretion to implement and carry out an estate recovery 
program, in lieu of the current mandate. In this manner Congress will 
have allowed those states who desire to continue estate recovery 
activities to do so, while giving states that do not wish to 
participate in estate recovery the right to withdraw.




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