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After her mother died, an Iowa woman learned she owed over $200,000 to Medicaid

AYESHA RASCOE, HOST:

Medicaid is often described as health insurance for low-income Americans. But Medicaid covers a lot of middle-class Americans, especially when they need long-term care in their later years. And the Medicaid program is growing. Almost 95 million are currently covered. It doesn't always work out perfectly, though. Case in point - Jen Coghlan of Perry, Iowa, who joins us now, along with Tony Leys, who wrote about her experience for NPR's partner, Kaiser Health News. Tony and Jen, welcome to the program.

TONY LEYS: Thanks for having us.

JEN COGHLAN: Yes, thank you.

RASCOE: So, Jen, tell us, how did your family end up getting involved in dealing with Medicaid?

COGHLAN: My mother went in for a knee surgery. And after the surgery, she started hallucinating really badly. And they diagnosed her, eventually, with Lewy body dementia. And my father, especially, did not want her to go to a nursing home of any kind. He wanted to keep her at home. So they sent people from the aging health agency in our county, and they signed us up for this medical elderly waiver.

RASCOE: And so, Tony, what is this waiver?

LEYS: It's a program that is funded through Medicaid, but it helps families keep people at home instead of putting them in a nursing home.

RASCOE: And so I'm sorry to, you know, hear that - after your mom passed away, that you actually got this really surprising letter.

COGHLAN: Yeah, I have it right in front of me. It says - dear family of Francis Ruhl, we've been informed of the death of the above person, and we wish to express our sincere condolences. And it says the medical assistant debt in bold at the top of the letter - $226,611.35.

RASCOE: That's the debt that you owe to the Medicaid program.

COGHLAN: Correct. That's what they are saying.

RASCOE: The way I guess some people would pay a amount like that, they would have to, like, sell a home or sell property, right?

COGHLAN: Correct. And when I got this letter, I called the phone number on it immediately. The gentleman - I did not get his name - said it's in the fine print. 'Cause I said, we did not sign up for anything that said we had to pay anything back. And he said, it's in the fine print.

RASCOE: Tony, you've been following Jen's story. I guess, can you explain, like, what exactly happened here?

LEYS: Well, all state Medicaid programs are required by federal law to have an estate recovery program like this. But what's really striking is that some states are much more aggressive about it than others, including Iowa as one of the most aggressive. And the idea behind it being that Medicaid is supposed to be a safety net program for people without much money. And so the original idea was, if you had a bunch of assets in your estate after you died, it was the state's right to go scoop that to pay back. But the thing is, it winds up hitting families without very many resources because if you have a pretty good lawyer, you can set things up years ahead of time so that this doesn't happen to you as much.

RASCOE: OK, so can you talk a bit about that?

LEYS: It really varies by state what kind of assets are eligible to be recouped this way. But depending on the state you're in, there are various kinds of trusts you can set up. But you have to do it years ahead of time. You can't do it right when you're signing up for Medicaid.

RASCOE: Jen, so obviously this - I can't imagine the stress that that is to have a $200,000 bill hanging over your head. What comes next for you and your family in this process?

COGHLAN: I think I just need to wait until my dad passes and see if they decide to put their hand in the pie or not to try to get any money back. I really don't know.

RASCOE: And when you say, like, just waiting - because your father is still living in the family home, so they can't come after the house while he's in it.

COGHLAN: Right, but I am extremely stressed as to what's going to happen after he passes, like that's not going to be stressful enough.

RASCOE: Yeah, who wants to think about that? Tony, is there an appeal process? Is there a way that you can, you know, try to get out from under this?

LEYS: There is a hardship waiver that you can apply for. In Iowa, 40 of them were granted last year out of about 3,900 estates that were collected against. So it's not an easy thing to get, but, yes, you can ask for a hardship waiver to the collection.

RASCOE: You talked to the Iowa state Medicaid director. What did they have to say?

LEYS: Well, they have made it clear in the last couple of years on the application that you fill out that this is part of the deal. I looked at the paperwork that Jen filled out, and it wasn't clear at all on that paperwork. It is clearer now 'cause the Medicaid director said they don't like to surprise people with this. But they're required by federal law to do this, so they do it.

RASCOE: That's Tony Leys of Kaiser Health News and Jen Coghlan. Thank you so much for talking with us.

LEYS: Thank you.

COGHLAN: Thank you. Transcript provided by NPR, Copyright NPR.

Ayesha Rascoe is a White House correspondent for NPR. She is currently covering her third presidential administration. Rascoe's White House coverage has included a number of high profile foreign trips, including President Trump's 2019 summit with North Korean leader Kim Jong Un in Hanoi, Vietnam, and President Obama's final NATO summit in Warsaw, Poland in 2016. As a part of the White House team, she's also a regular on the NPR Politics Podcast.