State finds Medicaid expansion surpriseNews added by Benefits Pro on January 3, 2014

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By Allison Bell

Regulators in Washington state have discovered — and are trying to fix — a common Medicaid plan feature that could trip up low-income exchange users.

To reduce the risk that families with assets will think of Medicaid as a free long-term care insurance plan, federal regulations require states to put liens on the homes, cars and other assets of Medicaid users ages 55 and older, to help state recover any money spent on long-term care from the Medicaid users’ estates.

Washington and many other states, including California, Florida and New York, interpret the regulations to mean that they should use liens to try to recover any money spent by Medicaid on any care for people ages 55 and older, not just for long-term care specifically.

Meanwhile, the new Patient Protection and Affordable Care Act exchanges will be encouraging many consumers — including low-income workers ages 55 and older who’ve had private individual insurance, or have lost employer-sponsored group coverage— to sign up for Medicaid.

The Seattle Times reported that some Washington exchange users noticed information about the Medicaid asset recovery provision in their applications and complained to state officials.

The Washington Health Care Authority has responded by issuing an emergency rule that limits the state's Medicaid program asset recovery program. The program will now try to make recoveries only for Medicaid funds spent on LTC services, not on funds spent on ordinary medical care. The rule took effect Wednesday.

The authority is changing the recovery policy to eliminate a barrier to applying for health care coverage through the exchanges, officials said in an rule-making notice.

"For the Affordable Care Act to be implemented successfully, it is important to get as many people as possible to apply for health coverage through the health benefit exchange," officials said.

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