Michigan Senate approves Medicaid estate recovery bill

The Michigan Senate on Thursday approved legislation that would require the state Department of Community Health to develop a program to recoup costs paid by Medicaid for people who lived in nursing homes or received in-home care services before their death, the Detroit News reports.

Michigan Gov. Jennifer Granholm (D) was expected to sign the bill.

The state is the last in the nation to pass an estate recovery program required by federal law. Department of Community Health Director Janet Olszewski, in a letter to state senators earlier this month, wrote that the state could lose $5 billion -- or more than 50% of the state's $8.6 billion Medicaid budget -- in federal Medicaid payments if the state does not comply will the requirement by Sept. 30.

Under the bill, nursing home residents who are current Medicaid beneficiaries would be exempt from estate recovery efforts. Exemptions also include homes occupied by spouses, children who are minors or relatives with disabilities. People also would be able to seek a "hardship exemption," according to the News. In addition, the measure requires examining options for a voluntary estate preservation program, which could allow residents to make payments to avoid estate recovery.

State Medicaid Director Paul Reinhart said that while the number of elderly people who rely on Medicaid to pay their long-term care costs makes up a small portion of the state's 1.6 million Medicaid beneficiaries, their care accounts for 25% of the Medicaid budget. Reinhart added that the number of Medicaid beneficiaries who will be subject to estate recovery is expected to increase from 40,500 in 2010 to 61,000 in 2030 (Kozlowski, Detroit News, 9/28).