Legal: I am not a lawyer. I am providing information as best as I understand it, and it is possible that I have a errors or omissions. Check with your own lawyers before relying on the information here.

(Written 7/19/19 by Norm Spier, Easthampton, MA)


Some of Which Are Not Well Known

So That They Can Be Fixed in any ACA Patch,
and Also as Considerations In the Question of Whether to Replace ACA By a Medicare for All or a Single Payer System

I have cataloged a few issues here, some of which are substantial but quite under-reported or non-reported.

ISSUE 1: There is an Estate Recovery Provision for Medicaid including ACA Expanded Medicaid.

(It applies to people 55 and older when they received the Medicaid, and Only in States that Choose to Recover Non-Long-Term-Care-Related Medicaid Expenses.)

Where it applies, the coverage is not insurance at all. The coverage is actually a "loan until death for uninsured medical expenses".

ACA coverage is split into expanded Medicaid for people with Modified Adjusted Gross Incomes (MAGI) <=138% of the Federal Poverty Level (FPL), and ACA insurance plans. The insurance plans are subsidized, on a sliding scale, for people with MAGIs <= 400% FPL, provided the person is not eligible for a traditional Medicaid or expanded Medicaid, and provided the insurance is purchased on the exchange.

(There will also be some people with incomes usually <=138% getting coverage through a traditional pre-ACA Medicaid, which existed prior to the ACA, and still exists. Typically people with very low assets, or special conditions, like pregnant women, would get the traditional Medicaid. To understand the issue adequately, it needs to be noted that there are 3 classes of people "covered" by the ACA plus the still-existent traditional Medicaid: Those covered by traditional Medicaid, those covered by expanded Medicaid, and those covered by on-exchange plans.)

Federal law gives states the option to recover all medical expenses paid out for any form of Medicaid (including expanded Medicaid) for people who were 55 or older when they got the Medicaid. (Federal law requires states to recover from the estate all long-term-care-related medical expenses, but states also have the option of recovering all medical expenses from people who were 55 or older when they received any form of Medicaid. )

A number of states which have expanded Medicaid, including MA, NJ, IA, NV, NH, ND, OH, and RI, and also the District of Columbia, currently do the recovery of all medical expenses for people 55 and older.

The recovery of Medicaid expenses is a problem under the ACA, because the ACA is promoted and presumably intended to give everyone access to health insurance that they can afford.

However, when there is estate recovery of all medical expenses incurred, there is, in fact, not even insurance of any sort. There is only a loan for medical expenses.

For example, if on a year of expanded Medicaid coverage at age 57 a person got sick, and had $700,000 in bills that year, then the full $700,000 has to be paid back when the person dies, from the estate. The person had no insurance at all.

(If they didn't have to pay anything back, that would be insurance. You can argue that if the Medicaid agency made the estate pay back a premium-equivalent, maybe $8,000 for a year of coverage, that would be insurance. $700,000, when full medical bills have to be paid back, is not insurance.)

If a person with this Medicaid non-insurance "coverage" figures out that their estates are liable for full medical expenses, and does research, they do have an alternative. They can't get a subsidized on-exchange plan, because of ACA rules. But they can pay full price, and get an unsubsidized on-exchange plan.

People with substantial assets who happen to be getting one of the Medicaids because their MAGI makes them look on-paper poor, such as early retirees, can pay full price.

But obviously, a lot of people with incomes <=138% FPL can't, so they mostly have no options to get real insurance.

That I know of, 7 Medicaid expansion states CA, MN, OR, WA, NY, CO, and PA have either modified laws or regulations preventing the non-long-term-related recovery post ACA, or did not have them just prior to ACA, and so their ACA coverage, when it is expanded Medicaid, or another non-long-term-care-related Medicaid, is real insurance. (CT also, but missing some people in the correction.)

An in many states, the non-long-term-care-related recovery was never done.

However, in at least MA, NJ, IA, NV, NH, ND, OH, and RI, and also the District of Columbia, the problem remains.

Table Showing Issue 1 Problem Area (red) and Issue 3 (yellow; described later on this page)
<=138% Federal Poverty Level (FPL) 138% FPL to 400% FPL >400% FPL
Age <55 Expanded Medicaid acting as real insurance On exchange subsidized,

0%-<10% of your MAGI for second lowest cost silver plan;

you get real insurance

On exchange unsubsidized.

Due to loss of subsidy, price may jump $10,000 on you for crossing 400% FPL.

It may be well over 10% of your MAG income, and unaffordable.

At least you get real insurance.

Age 55-<65

You get a BOMB

Expanded Medicaid acting as a loan for uninsured medical expenses to be payed back at death!

Except in states that don't do non-long-term-care-related estate recovery: You have no insurance at all. You are going bare.

On exchange subsidized,

0%-<10% of your MAGI for second lowest cost silver plan;

you get real insurance
On exchange unsubsidized.

Due to loss of subsidy, price may jump say $10,000 a year on you for a family, for crossing 400% FPL.

It may be well over 10% of your MAG income, and unaffordable.

At least you get real insurance.
Age 65 and Up

You get Medicare

You have real Insurance

You get Medicare

You have real Insurance

You get Medicare

You have real Insurance

What a goofy thing is the ACA, in states that have expanded Medicaid but not limited estate recovery, with that big red cell there. It's there because there is perhaps a little less money around than is needed. But in a crazy, inept fashion, the state governments have really botched it, and make some people completely uninsured!

Note the issue causes a second big discontinuity in how people are treated, in addition to the more publicized first.

It is somewhat well publicized in that there is an inequity in the ACA, in that people just below 400% of the FPL get subsidized on-exchange plans, net premium capped at around 9.86% of MAGI for second lowest cost silver plan. (See this ref.)

When people cross from below 400% of the FPL to above, the subsidy stops, and this can lead to having to pay $5,000 or $10,000 more for health insurance just due to crossing over: a discontinuity. (I think the Biden 7/2019 proposal fixes this, if I'm not mistaken, with a cap on after-subsidy premium of about 12% for everyone for second lowest cost silver plan.) Note this crossing 400% discontinuity is another one of the ACA issues reported on this web-page.

The second, less-well-known discontinuity is the estate recovery--my "issue 1". In states which maintain the recovery, people just above 138% FPL get almost-free insurance, that's real insurance. Their estate doesn't have to pay bills back when they die.

But people just below 138% don't get insurance. They get a loan, and their estate has to pay back all the medical expenses paid out when they die, to the extent the estate has the money.

So, that's a pretty big discontinuity.

The American way of doing things is full of such discontinuities. (See, for example the 2012 CT high-risk-pool rates, $1000 stop-loss plan, here. If you are 60-64, and your income is $32,670 or less for a household of 1, you get the pool coverage for just $1214.14 a month. If your income is a dollar higher, $32,671, you pay $3908.02 a month. So that's a $32,326.56 a year per person discontinuity. That's kind of big.)

But, if you have the ACA expanded Medicaid in most states, and you got sick, to the tune of $700,000, you have a $700,000 discontinuity for going from 137.99% of FPL to 138.01% of FPL. We have to be careful in comparing American-crazy-patchwork discontinuties here, because one is per year, and the other is one-time, but the ACA discontinuity might be record-setting if you got sick enough.

Note the Goofy Effect In States Not Correcting: Medicaid Expansion is Actually a Bad Thing for people at 100%-138% of FPL

Because, in non-expansion states, people down to 100% FPL get on-exchange plans. For 100%-138% FPL, the insurance is almost free, like expanded Medicaid. And it's real insurance. People don't have to worry about the state coming after their estates for $700,000 at death. (A few other people below 100% FPL for MAGI would be helped as well. Those who take the expanded Medicaid in expansion states, unaware that they have no insurance. People who can afford on-exchange subsidized, say early retirees with assets, will be protected from the noninsurance that they thought was insurance, by the unavailability of expanded Medicaid. And they'll pick up on-exchange subsidized.)

I'm certainly not telling states not to expand Medicaid, because what happens to people 0%-100% of FPL is important. But I note this pernicious consequence of expanding Medicaid for some.

The Confused Thinking that Has Estate Recovery on a Non-Asset-Tested Benefit

Estate recovery is something that was designed for benefits that are asset tested. The purpose is to take a benefit that a person is only supposed to get if they have very low assets, and make a temporary exception so they can hang on for a while to the asset if is vital to the life of the person, or their spouse, such as a home.

It's awfully bad thinking that it has come to be used on a non-asset tested benefit, ACA coverage, the idea behind which is supposed to be that everyone gets insurance, premium dependent on income, without any kind of asset test, so that everyone is covered.

Why Medicaid non-long-term-care-related Expenses Need Now to Be Treated As Different From Medicaid Long Term Care / Nursing Home Expenses

Because the principle of the ACA is that everyone is supposed to be able to get health insurance (for medical expenses) at a price they can afford. It's a new principle for our country, in effect since 2014. An attempt at progress.

However, we have not established a principle that everyone can get long-term care insurance at a price they can afford. Long-term care / nursing homes is a problem for another day.

(Note that if we allow Medicaid non-long-term-care-related expenses to be estate recovered, then, as I pointed out (a)ACA expanded Medicaid and other non-long-term-care-related Medicaids are not insurance, and just a bomb of a loan for people, and (b) the only alternative to avoid the bomb under the ACA is for people to pay full price for an on-exchange plan. But alternative (b) is not in reach of most people with expanded Medicaid.)

Thus, with the ACA as it is, the Medicaid recovery of non-long-term-care-related expenses winds up perniciously missing its goal: some people get not insurance, but a bomb. It winds up being a case of governments not up to the task having produced an inept, defective solution.

Combining the prior two: Having non-long-term-care-related expense recovery represents a double failure in analysis. Estate recovery does not belong on non-long-term-care-related expenses post-ACA, and it does not belong on anything not asset tested.

Taking Advantage of Expanded Medicaid Recipients when The Federal Government Pays the States 90% of Medical Costs.

Even expanding up to all non-long-term-care-related Medicaids, virtually all of the traditional Medicaids have an asset test. So there will be virtually no assets to collect from non-long-term-care-related Medicaid estates, with the exception of expanded Medicaid. But the state is already getting 90% of costs payed by the Federal Government. Come on.

Beware the false assumption that people under 138% of the Federal Poverty Level have no assets to lose worth worrying about.

Some of the reaction I've been getting to my concerns over the expanded Medicaid estate recovery is that people under 138% of the Federal Poverty Level pretty much are a class of people who will never accumulate any assets worth mentioning.

I find this to be false, sloppy thinking. Here is a table with 2019 138% FPL cutpoints.

Household of 1: $$17,236 2: $23,336 3: $29,435 etc.

Particularly in people 55 and older, there are lots categories of people who, either for a single year, or a fraction of a year, or a few years, will get expanded Medicaid by virtue of being under that cutpoint.

For example, older rust-belt workers, retraining, or a bit too sick to work full time, or working minimum wage jobs.

Or: people who retired early with modest or substantial savings and pensions. If they don't receive pensions yet, Social Security yet, and don't tap any IRAs yet, they can be living on savings from non-tax-deferred financial accounts. Only income from the non-tax-deferred accounts will count as MAG income, and this can easily be under 138% FPL.

Or: a family of a parent and two children, with the parent working at a minimum wage job. They will be on expanded Medicaid, missing the $29,435 cutpoint.

Issues of No Informing of People who Apply for the ACA Federally of the Estate Recovery on Medicaid and Expanded Medicaid, or inadequately conspicuous informing

On the Federal application (joint for on-exchange plans and expanded Medicaid; used in states without their own exchange), there is actually no warning. (From the Federal ACA application. See particularly p. 8, where nothing is mentioned in the section of conditions for Medicaid recipients.) In states that use their own exchanges, some of the states do have warnings, though often buried in the midst of about 20 benign-looking conditions, and often not being explicit, but requiring the hiring of a specialized attorney to figure out exactly if a person is at risk, and what a person might lose in the case of estate recovery. (MA is such a case. See the MA paper application. See adobe p. 22, items (9) and (10).)

Note This Really Needs to Be Fixed Federally. People Can't Be Made to Expect a Bomb from Their ACA Application, and Have to Hire Lawyers Every Year Before Applying for ACA to See What the State's Latest Rules are.

People have enough to worry about for health insurance in America. Making sure all of your providers are in-network, dealing with "surprise" bills, correcting errors and appealing non-payments, making sure you pay on time when your state government keeps switching you between the ACA halves, dealing with the 1040 ACA part, sending in income verifications to the state, etc. Consulting specialized lawyers every year is an added stupidity and waste in our already stupid and wasteful system.

Further, we note that in certain states, whether you current Medicaid or expanded Medicaid is recovered under current state procedures, or can be recovered in the future, is left completely unclear, and there may be no clear warning. For example, the Vermont Paper ACA application (expanded Medicaid and on-exchange jointly) has only the sentence: "Medicaid: If you or anyone in your household enrolls in Medicaid, you give the Medicaid agency the right to pursue and get any money from other health insurance, legal settlements, or other third parties" (p. 2), which could mean estate recovery of non-long-term-care-related medical expenses, but in a way that no one can figure it out. Further, the Vermont Health Connect site offers no conspicuous information about whether any estate recovery is done for non-long-term-care-related expenses.

The situation is also not absolutely clear in MN. Although that state stopped Medicaid estate recovery for non-long-term-care-related services in 2017, and current procedures indicate as much, there is still concern that the state may retroactively decide to collect expanded Medicaid non-long-term-care-related expenses for current years of coverage in the future. Because, on the current MN MNSURE application, on p. 21, there is wording permitting the non-long-term-care estate recovery.

Expanded Medicaid Enrollment Unpredictability due to State Estimation Methods and Errors: Forced Unavoidable Exposure to Estate Accruing Large Liabilities if a Person Gets Very Sick

It should be noted that determination that a person is eligible for Medicaid or expanded Medicaid rather than on-exchange plans is often the result of income estimates by state Medicaid agencies that use income databases and income estimation methods that are unknown and unpredictable to the applicant. Therefore, an individual may apply for ACA coverage expecting to receive a subsidized on-exchange plan, but may ultimately receive expanded Medicaid. Then. during the period when they have the expanded Medicaid coverage, they have exposure to the volatile risk of all medical expenses incurred accruing as a liability to the estate, with no possibility to switch to an on-exchange unsubsidized plan without a duration of such exposure. It should also be noted that unpredictable and unavoidable exposure to the risk of all medical expenses accruing to the person's estate also occurs when there is an error at the state and Federal agencies, where a person is incorrectly categorized as being eligible for Medicaid or expanded Medicaid, which lasts until such time as the agencies involved can be made to correct their error.

State Governments Often Won't Tell You Exactly What They Intend to Recover Until You Die

I have been told at least some states will let you see the accumulated tally of expenses to be potentially recovered at your death. (For example, my own MA has a procedure.)

Still, there's a likelihood of a dispute, and for instance the MA Estate Recovery Unit tells me it won't give any information on what exactly it intends to recover at death until my death and I become an estate.

So, for example, in MA, the first year of the ACA, 2014, our exchange was completely non-functional for the whole year, and they gave everyone, regardless of which part of the ACA they would have qualified for, a special "temporary Medicaid". Would a person who qualified for an on-exchange plan that year, and acquired $500,000 in non-long-term-care-related medical bills, be estate recovered? I asked this specific question to the MA Estate Recovery Unit and they wouldn't tell me since I was not dead. Would such person need to leave a big file for their estate so that lawyers could argue? (The MA law says it will recover, not may recover. The MA law seems to say such a person's estate would have to pay $500,000, and a person has no ability to challenge that while they are alive.)

For me, also, the following year, 2015, my income was well into the on-exchange zone. Somehow, the state gave me expanded Medicaid. I reported it immediately, and tried to get switched up to on-exchange multiple times. A special guy was assigned to try and correct the problem. Every time I called, he said "I'll send another email over to IT and try again to get it corrected". It never was corrected. Will they charge me for this? If I had accumulated $500,000 in medical bills (I didn't), would my estate have to dispute that? Using only whatever records I thought to save from however many years ago?

I've gotten some feedback also now for someone who knows the situation in MN. Apparently there were cases of the state mis-categorizing ACA people into the expanded Medicaid when they should have had on-exchange. Apparently in MN there is no way to have incorrect records fixed while the person is alive. MN has told people that correcting any errors in the record has to be put off until there is an estate.

Note The Widespread Misuse of the Term "Insured"

From the MA Health Connector, the common point of application for all ACA insurance, expanded Medicaid and on-exchange, their facebook page says "insurance" is what you get. That's false. What you get is either insurance, or a loan!

Here it says only 3.3% of people in MA are uninsured, giving it the highest insured rate in the country. That's false. About 1/4 of the people in MA have some form of MassHealth for non-long-term-care-related expenses. Perhaps 1/5 of those are 55 and older. So 5% of people in MA have "a loan until death for uninsured medical expenses". I get 8.3% uninsured for MA. WA, CA, OR, MN all have real insurance for all of ACA. They have WA 7.1%. CA 8.1%. OR 8.2%. MN: 5.1%. They all beat MA. Minnesota is the winner.:


It seems easy, Federally, to stop estate recovery of any non-long-term-care-related expenses in Medicaid. This might cost states money. The states might resist. Maybe they'll do it if they get compensation from the Federal government.


That other Medicaid-expansion states have done away with the recovery for non-long-term-care-related, or didn't have it pre-ACA and still doesn't.

(Note that the recovery is required for long-term-care = nursing home expenses by Federal law to the extent of probate estates. Medical is optional, as is the option to recovery from all estates beyond probate estates. As I understand it, a beneficiary arrangement on a financial account makes the account not part of a probate estate, and there is something you can do with a house, but you may not technically own it.)

OR: As detailed in a 2014 Washington Post article, people in Oregon seeing the estate recovery were refusing to sign up for the ACA at ACA start in 2014. The Oregon Medicaid director indicated they were looking at the problem in light of the mandate to carry coverage ("We needed to take another look at heath insurance coverage from the point of view of it not being a public benefit that's voluntary"), and he indicated recovery of non-long-term-care related expenses would be stopped soon.

The resolution mentioned by the Medicaid director did take affect, at ACA start in 2014, as shown this article.

You can also verify this from the Oregon State Estate Recovery document.

WA: Just before the ACA started, the Seattle Times picked up the problem: this article. The problem was resolved, apparently 3 days after the Seattle Times article. This was 7 years ago, just before the ACA went into effect this article.

You can also verify this from the current Washington State Estate Recovery document. You may need to verify that Apple Health is Washington's term for Medicaid, which you can do here.

Here's also the current WA ACA application (see pp. 4 and 12, and the referenced document 182-527-2742 ) .

NY: At ACA start: this NY state government post. See "Estate Recovery" at the bottom of the page. (Thanks to Denise T Rochon for finding this link for me.)

This is confirmed by the text on the NY multipurpose application, which is one way to apply for all Medicaids. On p. 23,

"I understand that effective April 1, 2014, if I get Medicaid through New York State of Health:
No lien will be placed on my real property prior to my death;
Recovery from assets in my estate upon my death is limited to the amount Medicaid paid for the cost of nursing home care, home and community-based services, and related hospital and prescription drug services received on or after my 55th birthday."

NY also has an application for all ACA coverage (on-exchange and expanded Medicaid) and some other Medicaids: NY unified health insurance application paper, and you see, on the last 2 pages: no mention of recovery of money at death, because it's not needed under NY State Laws.

CT: Within 6 months of ACA start, retroactive to start, but with holes. (Leaving a small Husky A--adults with dependent children--subgroup, as well as possibly non-negligible Husky C--disabled employees--group, out): Initially reported in April 2014 CT Mirror story here as an interim step while the government formally changes its policy.

An internal CT Department of Social Services document corroborates this, indicated a state plan amendment CT-14-022 will be filed with the feds for Husky D, the new CT Medicaid designed for expanded Medicaid people.

And here we see it on the Federal website, approved on 6/5/14, retroactive to 1/1/14.

You may want to verify what the various CT Medicaid HUSKY programs are. You can do that here. You can see that that Husky A is limited to adults with minor children, so a person 55 or older, the people subject to non-long-term-care-associated estate recovery, would have to have had kids at age 37 or older to be in the group. People do have kids at that age, women and men. The group is not negligible. I don't why they didn't include Husky A. I consider that a mistake or laziness by the CT government. For Husky C, it sounds like some of this is care beyond ACA. But some of it is within the scope of ACA, and it seems like defeating the intent of ACA to estate recover for that within-ACA-scope care. (Also, it is not 100% clear from the website whether a person who does qualify for Husky C and reject it, and get the Husky D.)

(Thanks to Denise T Rochon for much of this.)

MN: That state actually was asset recovering ACA. They were honest enough to send every Medicaid / Expanded Medicaid recipient an explicit notice of intent to collect assets from their estate. This provoked a public outrage, such as this article, and this MN StarTribune editorial and the practice was stopped (here). There is also confirmation of current practices on the MN state site here.

However, there is a valid concern for MN that it may retroactively decide to collect expanded Medicaid medical expenses for current years in the future. Because, on the MN MNSURE application (combined ACA expanded-Medicaid and on-exchange plan), there is one place an explicit statement (adobe p. 28) that that MN must collect long-term-care-related expenses (this doesn't mess up ACA), but it also has (adobe p. 21) "If anyone on this application is eligible for Medical Assistance, I have read and understand that the state may claim repayment for the cost of medical care, or the cost of the premiums paid for care, from my estate or my spouse's estate". This seems to indicate MN may be allowing itself the freedom to retroactively decide to collect from estates for current ACA expanded Medicaid recipients, despite not doing it under current procedures. (Thank you Rick Rayburn for pointing this out to me.)

CA: A 2015 story from KQED which was part of the impetus for change: here. And also another 2015 story from the Orange County Register here. And the recovery was stopped in 2017: this pamphlet. See p. 5. You can also verify this from the California State Estate Recovery document.

Detail on CA. The CA articles that prompted change dropping of the non-long-term-care-related estate recovery discuss particular cases where an annual premium was taken from the estate, not a catastrophic amount like $900,000 for extensive hospitalization. It is unclear from those articles (all that I could find on search) whether if there would have been extensive hospitalizations, etc., whether those bills, uninsured, would have been passed along to the estate.

It may depend on the particular state, and how it manages its Medicaids. In my own state of MA, most definitely, the law says all "payment for all services that were provided", and my understanding is that hospitalizations, etc., and paid directly by MA Medicaid, and not through an intermediary insurer, plus there may be an annual per-person payment for the primary care provider. Thus, the payment for services would seem to include, or potentially include, the full hospital bills, etc., plus an annual fixed payment to a primary care provider.

Further, if you look at the current MN MNSURE application, you see that even though non-nursing-home-related estate recovery is stopped for now, the form still makes you sign "the state may claim repayment for the cost of medical care" (as opposed to premiums, which it also lists as an option for itself). Thus, the scope of the estate recovery in general extends beyond just premiums, but to all medical expenses. This is why I have described it as there is "no insurance at all".

The second article, from 2015, also has this quote "But California is among 10 states that seeks repayment beyond the federal minimum, says Anthony Wright, executive director of Health Access California." Since CA and MN have subsequently stopped, it must be at most 8 states that now, in 2019, seek repayment beyond the federal minimum. (The Federal minimum is long term care only.) But, since the quote is from an advocate, we can't count 100% on it being correct.

CO: This document shows that Colorado is no longer doing non-long-term-care-related estate recovery. (See the last column on p. 2.)

PA: Appears not to have had non-long-term-care-related estate recovery pre-ACA, and the status still persists. See this document and this document

Site with some (as of July 2014) by-state data on non-long-term-care estate recovery here. It reports "Currently, 15 of the 26 states plus the District of Columbia, which expanded Medicaid in 2014, target both LTSS and non-LTSS benefits in their estate recovery programs: California, Colorado, District of Columbia, Hawaii, Iowa, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, and Rhode Island."

My own table of by-state non-long-term-care-related Medicaid estate recovery here. (It is not complete, as of 8/2019, but does link to some state documents detailing estate recovery practices which are not on the current page.)

Showing that in 2014, the Obama Administration attempted to have all states not recover non-long-term-care-related expenses to at least the extent of expanded Medicaid enrollees, but apparently lacked the authority.

2014 Health Affairs Tim Jost blog post here. Quoting from the letter sent by the Obama Administration's Center for Medicaid and Medicare Services (CMS), "CMS intends to thoroughly explore options and to use any available authorities to eliminate recovery of Medicaid benefits consisting of items or services other than long term care and related services in the case of individuals who are determined eligible for Medicaid benefits using the MAGI methodology."

It is important to note that the request is limited to MAGI-methodology Medicaid recipients. It's short of what should be the full request, to eliminate the recovery of all services other than long term care and related services. That is, it omits many people who have a non-long-term-care-related services Medicaid that would have existed prior to the ACA. This is what is needed post ACA, where the law of the land should be that everyone gets real medical insurance at a price they can afford. The reason for the limitation to MAGI-methodology enrollees must be that those are the ones for whom the Federal government pays at least 90% of the medical cost, so the CMS figured the states could swing any financial losses.

Legal Reference for the Options States Have on Medicaid Estate Recovery. (That, in general, as state can recover all non-long-term-care-related expenses for Medicaid or Expanded Medicaid if it chooses):

This is the clearest. See paragraph 1 here.

This is pretty clear, too. Paragraph 1 here.

This is an nice official source: page. (Paragraph 1.)

This is a little muddy. But it's, and people trust that source. Here.

This link clarifies the exact scope of the minimum estate recovery required by Federal law: HHS ASPE Document. It is "Nursing home or other long-term institutional services, home- and community-based services, and hospital and prescription drug services provided while the recipient was receiving nursing facility or home- and community-based services."

That it can be fully all medical expenses to be paid back: Many of the documents I link to talk about "medical expenses" being paid back, and so do some of the laws (e.g the MA recovery regulation). The most explicit I can find on the matter is the current MN ACA application, where, though MN currently does not recover other than long-term-care, they are apparently leaving open the option to retroactively recover, and thus, MN MNSURE application (combined ACA expanded-Medicaid and on-exchange plan ;adobe p. 21) "If anyone on this application is eligible for Medical Assistance, I have read and understand that the state may claim repayment for the cost of medical care, or the cost of the premiums paid for care, from my estate or my spouse's estate". (Thanks to Rick Rayburn for this reference.)

Technical detail on estate recovery, note that after a state does the estate recovery, it is split between the Federal government and the state by some formula. (Thanks to Rick Rayburn for pointing this out to me.)

Some outrage in general, across all states that permit it, about this estate recovery of non-long-term-care-related expenses under ACA

Huffington Post: here.

Paul Craig Roberts: Although you might, and I do, disagree with Dr. Roberts' general opposition to the ACA (here), and on other issues, his 2014 look at the estate recovery aspect of the ACA here is pretty sharp.

In fact, his detail-oriented Ph.D.-in-economics-level mind has picked up a subtle issue that I thought I was the only one who noticed. The issue that you may apply for ACA thinking you'll get real insurance, because your income is above 138% FPL, (where there is a clause about the medical expenses recovery no matter buried it is) but then in subsequent automatic0by-state-agency processes, you may be thrown down to non-insurance expanded Medicaid, without time to decline the bomb. (This actually happened to me in MA twice in the last year. The first time, for income verification, the MA Health Insurance Processing Center over-rode my honest estimate via straight-line extrapolation of two successive year 1040 MAGIs, and used the year's MAGI. The second time, for expanded Medicaid, updated FPL cutpoints were inserted in May.)

He also mentions that whatever notification is in the fine print of your state's ACA and Medicaid is there because of a federal requirement under 1990s Medicaid law, and your state might not even have put that in there, buried in the fine print, if they didn't have to.

(I certainly wish some of the many other detail-oriented Ph.D.-in-economics-level minds who regularly write columns in the mainstream media would point about this recovery thing, that must affect at least 5 million people--those people 55 and over get some sort of non-long-term-care-related expenses Medicaid. I think Paul Roberts is alone on among that class pointing it out to us.)

Appearance in the mainstream media, when referring to the issue nationally (not just statewise) is rare.

Except, a very new one: The Atlantic Monthly Oct 2019. With this article. (It covers both the recovery of long-term-care-related expenses, which is a problem coming from that many people don't have nursing home insurance, and perhaps that there is no national affordable nursing home insurance program (not the subject of the issue I am reporting on here), and the problem of the interaction with the ACA, making the affordable health insurance really not insurance, but just a loan for medical expenses. (Also, this podcast with the author discussing the article here.)

There was also one in the Washington Post in 2014, here.

Atlantic Monthly 2014: here. This is a good article. The issue is well-explained. Note that either shortly before the article appeared or in the following years, some states: notably WA, OR, NY, CT (mostly), CA, and MN corrected the problem, but the problem remains in around 10 states, including MA.

The PBS Newshour from a few years ago PBS Newhour Story: here.

(The story has been covered in major news sources at the state level for WA, MN, and CA, all of which stopped the recovery of non-long-term-care-related recovery soon after the articles appeared.)

My own site, detailing the problem and the state laws for my own state of MA.

My site for MA is here.

A Rare Federal-Level Attempt to Fix the Problem: A Bill Introduced in 2018

Here. The bill was introduced in 2018, put failed to get a co-sponsor, and was abandoned. (Thanks to Rick Rayburn for this information.)

ISSUE 2: Split of Coverage into Medicaid and Expanded Medicaid and On-Exchange Plans is Too Complicated for the States To Manage, Resulting in Coverage Gaps, Excessive Churning, and Wasted Time for People.

Obamacare is split into 2 halves: expanded Medicaid and on exchange plans. ACA coverage is split into expanded Medicaid for people with Modified Adjusted Gross Income (MAGI) <=138% of the Federal Poverty Level (FPL), and if their income is higher, they get an on-exchange ACA plan. The on-exchange plan is subsidized, on a sliding scale, for people with MAGIs <=400% FPL.

(There are also be some people with incomes <=138% getting coverage through a traditional pre-ACA Medicaid, which existed prior to the ACA. Typically people with very low assets, or special conditions, like pregnant women would get this. To describe the issue correctly, there are 3 classes of people "covered" by the ACA plus the old Medicaid, which still exists. Those covered by traditional Medicaid, by expanded Medicaid, and by on-exchange plans.)

If states are not really, really adept, there can be all sorts of gaps in coverage, and thrashings of people back and forth between the two halves of the ACA, as state Medicaid agencies, in imperfectly thought out processes, and in coordination with state or federal ACA exchange agencies, manage people who have MAG incomes that don't stay continuously in one half.

People who are very mathematical, and/or program computers, will note that ACA on-exchange plan eligibility is based on an estimate for annual MAGI with an FPL scale from the beginning of the year, while traditionally, Medicaid eligibility has been based on monthly. Further, traditionally, Medicaid has been based on FPL income values that change in April. Thus, numerous problems will be obvious if the state agencies aren't very, very adept. Or, even if they are adept, if they have been bound by Federal rules that constrain them excessively.

Add to that, that you can't, if you know what you're doing, just go ahead and switch a person between ACA halves on short notice when the regulatory agency decides there's a change in the half that a person is eligible for. (If you do that, you can bankrupt a person if they are in the hospital for a bit, as in-network, etc., becomes out-of-network, or if they are on vacation.) So you can see we have an orgy of potential problems.

Let me illustrate with my own situation here in MA, where, in the 12 months through Aug 2019, I have been switched 4 times. With serious problems many of those times.

1):Around 10/2018: Continued On exchange, subsidized. (The MA exchange requests people update income pre-open-enrollment. The exchange software accepts my honest estimated future income, above 138% FPL, and continues my on-exchange subsidized plan which I had had for several prior years.)

2)Around 11/2018: -->Expanded Medicaid: (the MA agencies asked for my 1040s to verify income. They insist on using last 1040 MAGI, and not my reasonable estimate. The number they use is below 138% FPL.)

The switch is on dangerously short notice. If I were in the hospital, or on vacation, I could have been bankrupted. (E.g. in in-network hospital, approved procedures, in-network surgeon and anaesthesiologist. When I get out of the hospital, I see the notice in my mail that I had a new plan, and in-network and approved procedures are out-of-network and unapproved for the new plan.)

3)Mar 2019: -->On exchange, subsidized: I do my 2018 1040 in Feb, notice the MAGI on the last 1040 is 138.9% FPL. I see that the 138.9% would cause two future churns, down in Jan 2020, and up in Mar 2020, and use a straight line extrapolation estimate, which was about 150% FPL. I put the number into the exchange website, and thus, on-exchange, subsidized.

The MA agencies request verification of income. I see the potential two churns. With my last two 1040s, I beg them to avoid two churns, and use the extrapolation of 150%, rather than the 138.9% from the last 1040. I point out that if they think my income is lower than what I am asking them to use, it just means I pay more. (Lower advance of subsidy.) They insist on last 1040, and continue, for now, my on-exchange, subsidized.

4)June 2019: -->Expanded Medicaid. (As a complete surprise to me, the MA Medicaid department reran its eligibility program in May 2019, with FPL values about 2% higher than they did in Feb.)

The switch is on dangerously short notice, just like switch (2). I received a notice in the mail on 5/25/19 that the last day of my on exchange coverage would be 5/31/19.

This short-notice switch, besides the financial danger, was a bit physically dangerous, because I was sick when they did it, and physicians were trying to diagnose the problem. There was a gap of four days where I had no network of providers.

It also worked that the Medicaid subplan that my PCP told me they were in, the only one they were in, Partner's Healthcare Choice, could not find the PCP in its database. Even after I got the National Provider Index (NPI) of my PCP for Partners. They had to spend a fews days arguing it out, and consulting agencies. Meanwhile, since the notice was so short, and I was sick, I had to in the meanwhile try to piece together an alternate PCP with one of the 9 Expanded Medicaid subplans. And then the subplan databases when queried by name were inaccurate, and I had to go calling every provider's billing office to get the more reliable NPI.

So, for this switch, the find-a-provider took 50 hours.

5)Aug 2019: -->On exchange, unsubsidized. (This one I initiated myself. To have real insurance, not just a loan for uninsured medical services until death, and also to avoid future short-notice churns, which apparently cannot be controlled.)

When I inquired about doing this hopefully last switch with the MA exchange ombudsperson office (the most knowledgeable people around the Connector for customer service), they told me they are completely separate from the Medicaid agency, and couldn't say whether my Expanded Medicaid would be dropped before my new coverage kicked in.

I had to call the MA Medicaid ombudpeople, who didn't know, but they thought there was a person at a non-profit who might know. The person did know. She told me I had to make the change in the on-line website no sooner than the 18th of the month, and pay no later than the 22nd of the month. I did this. I am in the middle of the process, waiting for the new on-exchange unsubsidized. I hope what she told me was correct, and there is no gap in coverage.

I've noted the procedures that the Federal exchange apparently uses are different than those that the MA Health Connector used, and might have, but would not necessarily have, avoided the pair of short-notice loss of an on-exchange-policy being relied on that I reported on in (2) and (4).

Note: The Federal exchange will not explicitly cancel an on-exchange policy upon approval of the applicant for Medicaid by the state Medicaid agency, but rather will wait for the applicant to explicitly cancel it. (If the on-exchange policy is not explicitly cancelled, the Federal exchange will keep the on-exchange plan in effect, but will withdraw the subsidy. See this page and this page.) The non-cancellation might seem to have avoided the loss of coverage, but there still could have been an issue of eventual cancellation while away due to insufficient funds in the bank account to which autopays were withdrawn, due to the loss of subsidy.


This is a tough one to get via incremental-only change.

The complexity of having state-run Medicaid departments administering a complex system is daunting. An obvious solution is to stop all non-nursing-home Medicaids, and just have ACA on exchange. There is a funding shift, state to Federal. This is not incremental, and is a heavy political lift.

Maybe, for incremental, the Federal Government does all Expanded Medicaid and on-exchange eligibility, using good minds in one place, the Federal government, to make it flawless. However, there is still an issue with the traditional Medicaids, which have currently heavily state-dependent flavors and eligibility rules.


This 2011 document, from the just after the ACA was passed, but before it was implemented, showing the Federal government and states trying to prepare for and deal with coordination-between-halves issues.

I haven't read it all.

I did notice, on p. 6, text alerting the states about coordination issues, giving them some flexibility to craft skillful rules, and hoping they use the flexibility to "prevent coverage gaps and minimize individuals cycling between programs". (It seem to me like my own state of MA has bungled this, missing the last goal, when it seems technically feasible.)

"Although MAGI is determined on an annual basis, states still must determine Medicaid eligibility based on income as of the point in time of application. Thus, initial Medicaid eligibility for new applicants and other individuals not receiving Medicaid at the time of their eligibility determination will continue to be based on the current income actually available to an individual in a given month. For current Medicaid beneficiaries subject to MAGI, CMS proposes that states may elect to base financial eligibility determinations on either current monthly income or projected annual income, taking into account reasonably anticipated changes in income. Actual changes in income still must be reported by applicants and beneficiaries and acted upon by the state Medicaid agency. The option to rely on projected annual income for current beneficiaries enables states to align Medicaid income counting rules with the rules used to determine eligibility for premium tax credits through the Exchanges. This would, if adopted by states, prevent coverage gaps and minimize individuals cycling between programs."

There were some other articles, as well. Including this 2010 document, by Tim Jost (See "administering subsidies and mandates" on adobe p. 6.)

Further, this GAO document from October 2015 found that there were actual continuity of coverage issues due to inadequate synchronization of data and procedures, between state Medicaid agencies and the Federal exchange, in states that used the Federal exchange.

ISSUE 3: Subsidy Cliff and Potential Unaffordability Crossing Above 400% of the Federal Poverty Level with On-Exchange Plans.

For people without employer insurance, the subsidies for an ACA plan purchased on-exchange stop at 400% of the Federal Poverty Level (FPL). This results in a sharp "discontinuity of treatment" at 400% FPL, which is sometimes called the "subsidy cliff".

Net prices for the second lowest cost silver plan (SCLSP) just below the cliff are capped at 9.86% of Modified Adjusted Gross Income (MAGI) in 2019 (see page with subsidy information). However, upon crossing the cliff, the cost of the plan may rise sharply, and into unaffordability.

For example (silver plan), in Cook County, IL zip 60617, in 2019, one gets from a SCLSP rate of $21,266 for a married couple 63 years of age. If the couple's income is 401% of the FPL (FPL cutpoints), that works out to $84, 731. If the couple chooses the SCLSP, it will cost them 25.1% of their Modified Adjusted Gross Income. If their MAGI were 399% of the FPL, $84,308, the SCLSP would only have costed them 9,86% of their MAGI, or $8,312. The jump in cost at the discontinuity is $12,954.

Bronze plan alternative numbers example: In the case of certain states and certain insurers, for people above 250% of FPL, who don't get cost-sharing-reductions (CSRs), plans besides silver may provide better value. (This is because when payment by the Federal Government of cost-sharing-reduction compensation payments to insurers was stopped by the Trump administration, certain states either ordered insurers, or allowed insurers optionally, to assess actuarial costs for the cost-sharing-reductions that they had to pay for silver plan enrollees with FPLs below 250% FPL, to silver-plan-premiums only. (See this and this.) So, I provide also the Bronze plan numbers here for the same couple. (I am not able to figure out what the insurers and state did in IL in 2019, so the bronze plan numbers are here just to see if they increase affordability by much.)

The second lowest cost bronze plan for the example couple above was $18,513. At income levels of 399% of FPL and 401% of FPL, the net cost of the second lowest bronze plan would be $5,559 a year and $18,513 respectively. The jump in cost at the discontinuity point is $12,954, but the percent of MAGI that these represent are 6.6% and 21.9%, respectively. Thus, the second lowest cost bronze plan, though it has an out-of-pocket maximum about $2000 higher than the second lowest cost silver plan, may be slightly better value, but, above the subsidy cliff, at 21.9% of MAGI, it may still be considered unaffordable. Note that for the gold plans, all gold plans were more expensive than the second lowest cost silver plan, and so those would have all costed more than 25.1% of MAGI for the the over-the-cliff case.

(Note also out-of-pocked maximum for the silver plan for the example plans for couple was $14,100 for the silver plan, and $15,800 for the gold. These are themselves affordability issues, but there is a slight improvement only of 1% going to bronze from silver in total potential cost, premium plus stoploss, for a year. These were 41% of MAGI for bronze, 42% for silver, for the couple when over the cliff at 401% FPL.)

SOLVING ISSUE 3: Perhaps a subsidy reflective of a cap of 12% of MAGI for everyone with an on-exchange plan for Second Lowest Cost Silver Plan, or something similar.

The cost of doing this needs to be determined, of course, before doing it.

ISSUE 4: "Family Glitch" (unaffordable employer plan to insure whole family counts as affordable, blocking subidized on-exchange plan.)

To get a subsidized on-exchange plan, you must be unable to get an affordable employer plan, either from your own employer, or a family member.

From this KFF document "Employer coverage is considered affordable if the employee's contribution is less than 9.86 percent of his or her household income (for the employee's coverage only, not including the cost of adding family members). The employer's coverage must also meet the 'minimum value' standard, meaning that the plan has an actuarial value of at least 60 percent (equivalent to a bronze plan). In situations in which the employer's plan fails to meet one or both of these requirements, the employee and their family may be eligible for subsidized coverage through the Marketplace if they meet the other criteria listed above."

Thus, coverage for the whole family might be 25% of MAGI, leaving the subsidized on-exchange coverage unavailable, and, as well, the employer plan could be unaffordable.

Solving: Change the rule to "(for the cost of covering all family members)."

ISSUE 5: Excessive Out of Pocket Costs on the on-exchange plans

Out of pocket expenses are capped at around $7000 a year per individual, $14,000 for a family, on on-exchange plans not subject to cost-sharing-reductions. (Cost sharing reductions stop at 250% of the Federal Poverty Level.)

Add the high out-of-pocket maximums to the cost of insurance, and people perhaps 250% FPL to 700% FPL may have to spend a total of 50% of income on health insurance premiums plus copays.

(I did work out the total cost, premiums plus copays, for the age 63 Cook County, IL couple just above the cliff in the "cliff at 400%" example of a prior issue.) These were 41% of MAGI for bronze, 42% for silver, for the couple when over the cliff at 401% FPL.)

Solving: Tough, because added subsidies to fix (i.e. more people get cost-sharing reductions) is expensive. Our high cost of health care really makes this, and other problems, difficult to solve.

ISSUE 6: Employer Plans May be Weak, with excessive copays and annual maximums, but block subsidized on-exchange plans.

People eligible for an affordable (premium-wise) employer plan can not pick up a subsidized ACA on-exchange plan, which the ACA guarantees to have strong coverage. (See KFF document.) But, employer insurance may be weak in coverage, so people with weak employer coverage have no option to get good coverage. (Unless they can afford an unsubidized on-exchange plan.)

From this KFF document, the relevant detail is "[To prevent the availability of a subsidized on-exchange plan] The employer's coverage must also meet the 'minimum value' standard, meaning that the plan has an actuarial value of at least 60 percent (equivalent to a bronze plan)."

60% actuarial value could be a weak plan, with lifetime or annual maximum coverages. As well, the coverage may be far worse than what the person could get as a subsidized on exchange plan, particularly if they are in the <=250% Federal Poverty Level cost-sharing copay and stop-loss reductions zone.

Solving: Opening up exchange plans to people regardless of employer coverage, or at least to people whose employer coverage isn't at least as good as they would get on-exchange, in all important senses. This is certainly a cost concern for the Federal government.

ISSUE 7: Medical Service Costs are Out of Control in this Country. The ACA does Nothing to Fix It.

That's a big issue. I don't have any idea how to solve it. Mostly, even plans to change over to more-efficient single-payer don't assume much of a reduction in our medical costs, and allow total costs to be at 18% of GDP, which is about double to 50% higher than anywhere else in the developed world (where they get similar life expectancies).

Further note our predicament. Because health care costs are so high (predating ACA, of course), any attempt to do a fix, either by fixing ACA or switching to a broad Medicare for All or single payer, moves around so much financing--up to 10% or 11% of the GDP for single-payer, that it's very tough to do. Note that if we had low costs, like 9%-12% of GDP like everywhere else, instead of our 18%, we would could almost to health care on existent state and Federal taxes and payroll taxes.

Other Links related to Health Care

Links to 2012 CT high-risk pool rates, and Pre-ACA Info from Me done Long Ago:

2012 CT high-risk-pool rates, $7500 stop-loss plan. (Cheapest plan not income-tested): here.

Note the rate of $2077.18 a month for a male 60-64.

2012 CT high-risk-pool rates, $1000 stop-loss plan: here.

Note the humorous rate of $3908.02 a month for a male 60-64.

Obviously, the smart consumer will got the $7500 stop loss plan.

Notice also the hard-criterion 2/3 discount for low-income people. Just a case of our crazy, ever-present, ill-thought-out patchwork system, with all of these income cliffs / discontinuities that you just don't want to cross under or over.

A table done by me pre-ACA, exploring snags in the state high risk pools and other mechanisms to try and cover people with pre-existing-conditons:

I was looking not at rates, but just to see if a person who was being socially responsible, and had continuously maintained health insurance, rather than trying to game the system and just picking up insurance when they got sick, would be OK if they had a substantial pre-existing-condition and needed coverage.

The table is here.

The table is a mess, with lots of post-ACA comments added at the top. Further, all the links are now dead. I'm not sure anyone but me understands exactly what I did. But, in any case, the bottom line was that half of states had eligiblity gaps or serious coverage limits that could snare a person who had continuously prior maintained health insurance, if they never moved between states. And, counting if a person might want to move, then there were problems in about 3/4 of states. (The problems are where I have the red DANGERs. Remembers these are dangers just in eligibility, and coverage limits. They don't count excessively high high-risk-pool premiums. Unfortunately, I don't have high-risk-pool premiums saved except for CT. )

For Massachusetts Residents: I have a page about issue 1 as it applies to MA, with information about a pair of bills in the state legislature (8/2019) designed to fix issue 1 in MA here.


Health Affairs Blog: here. Note on the top left there is always a "Following the ACA" sub-blog to click on.

VoxCare facebook group. (Discussion of policy.): here.

Kaiser Health News (Click on "Health Law" at top for ACA / Single Payer news.): here.

Kaiser Family Foundation (Not the same as 'Kaiser Health News'): here.

Commonwealth Fund: here.

Centers for Medicare & Medicaid Services page for health care funding source and expenditure data. (sets files, many in MA Excel format, can be downloaded. Click on the links on the left to get a type of data.)

Some of the Centers for Medicare & Medicaid Services data in .pdf format. (I put these on my site in order to make current health care sources and destinations of expenditure available, believing they will be useful in analyzing attempts to convert the country to Medicare for All or Single Payer. It seems to do a complete Medicare for All with no private insurance, a shift in funding arrangements around 10% or so of the GDP may be needed.)


Thanks to Rick Rayburn, Denise Rochon, and John Bruder for some of the information on this page.


Repeat of Disclaimer: I'm not a lawyer. Check info with lawyers or by other methods before relying on it.

WaybackMachine backups of documenting links:

CA1 , CA2 , CA3 , CA4 , OR1 , OR2 , WA1 , WA2 , WA3 , WA4 , MN1 , MN2 , MN3 , MN4 , MN5 , RecpPwr , RecpPwr2 , PCRoberts , BakRecFail , MA ACAAPP 2019 , NY1 , NY2 , NY3 , Wik1 , Wik2 , Wik3 , Wik4 , Wik5 ,