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• What the Law Says - Mandatory "Estate Recovery" 

The disclosure and signature page of the forms that must be submitted for state-subsidized health insurance plans - MassHealth (the state’s Medicaid plan), Children’s Medical Security Plan (CMSP), Healthy Start, Commonwealth Care and the Health Safety Net - commonly referred to as the Medical Benefits Request (MBR) used to apply for the insurance and the Eligibility Review form (ERV) used to verify income after you are a member of one of the plans, includes notification of the "estate recovery" program.

What this means

In order to apply for Commonwealth Care, residents must submit a signed MassHealth MBR (or ERV) that contains a clause notifying the applicant that MassHealth has the right to recover money from the estate of any member who is age 55 or older when that person dies. See the exact text here. 

MassHealth is the name of the Bay State’s Medicaid program. Estate recovery is a Federal requirement for all states that receive Medicaid funding. It is not relevant only to Massachusetts. Your estate means your assets - all property including furniture, jewelry, real estate as well as your savings, annuities, etc. States have different names for their Medicaid plans. 

When the health insurance law was implemented, residents were required to fill out a MassHealth MBR which contained no reference to Commonwealth Care. Therefore, residents did not know if the disclosure on the signature page (or elsewhere in the application) applied only to MassHealth or to Commonwealth Care as well, and many refused to apply because of the estate recovery program. 

Sometime in fall 2007, a revised MBR was made available which did reference Commonwealth Care on the signature page but contained the same estate recovery clause, so many still refused to enroll. Despite public testimony stating that this clause must be removed or changed to clearly state that estate recovery does not apply to Commonwealth Care, another revision of the 

Massachusetts-style health insurance 
is NOT what 
the doctor 
ordered!

MBR came out in early 2008 which still contained the same language regarding estate recovery. 

During all this time, the Connector told residents who inquired that estate recovery didn’t apply to Commonwealth Care. However, the spoken word is not legally binding. The contract you are signing is. The form as it was would allow an estate to be recovered, and many still refused to apply.

In early to mid-August 2008, another revision of the MBR showed up which contained the same language described above but had new additional text stating: “Under current practice, estate recovery doesn’t apply to Commonwealth Care.” To date, this remains the same - a red flag indicating that the terms of the contract could change. How would a person know? Could they have already changed a week before you signed or might this be two months after? You could drive a Mack truck through this! And the irony is if the terms do change, you don’t have the right to terminate the policy because the insurance is compulsory. 

Reserving the right to change the terms of the contract after a resident has signed, constitutes a potentially unfair and deceptive act or practice. Furthermore, a contract that is changeable at any time via the unilateral decision of one party, i.e., the state or Federal government, essentially voids a resident’s rights, and due to the inequality of the parties, i.e., the government and the resident, such onerous terms might be deemed unconscionable.

In a state (or nation) that mandates health insurance, creating an “affordable” set of health insurance plans that “may be” or “are subject to” estate recovery and/or property liens is unconscionable. This includes Medicaid because under the mandate, you are eligible for certain plans based on your income and could end up in Medicaid. Furthermore, auto-enrollment of residents in any insurance plan that is or might be subject to the practices of estate recovery and/or property liens is a violation of their rights and lacks moral principle.

There is an Estate Recovery Unit in Worcester as well as a team of attorneys in the Massachusetts Office of Health and Human Services. Only in very limited situations will the system not pursue an estate. In fact, it is set up to seize the belongings of deceased policy holders, and the probate courts inform MassHealth as part of their process.

This is not a health insurance policy; it is a collateral loan! And, not only is it a loan, it discriminates by age. Considering the tap-dance that has taken place around this with regard to Commonwealth Care, it appears that the state has every intention of using estate recovery for this plan if it hasn’t already started. Under a national law that mandates health insurance, others in this nation could also be affected unless Medicaid law or policy is changed.

There are also real estate liens that MassHealth uses which are not age-related, but these are not even disclosed on the MBR or ERV. Strict recovery/repayment clauses for injury-related settlements at your job or in a motor vehicle accident for any age are also stated on these two forms. And, when you sign, you have given MassHealth permission to access your tax information from the Department of Revenue. Please note that the Connector has “clearance rights” to the MassHealth mainframe. If the Connector has your information it could go to one of the third-party vendors for all you know. Actually, you won’t know. 

It should also be noted that if you are cruising around the Connector website, as of the date of this writing, you will come across the following FAQ verbiage regarding estate recovery: "Do MassHealth Estate Recovery rules apply to the Commonwealth Care program? No. MassHealth estate recovery rules do not apply to Commonwealth Care costs. The Connector does not have an estate recovery program for Commonwealth Care."

The essential question is: do you want to go by the language on the the legally binding contract you are signing that says, “Under current practice . . .” or what is on the Connector’s website? Keep in mind that Commonwealth Care is not a Connector product. 

>See text of signature page with the legal agreements before August 2008 revision here. 
>See text of signature page with the legal agreements after August 2008 revision here.