ElderLaw News-The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News
ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President., William S. Fralin, Esq., President.

Congress’s Affirmation of Medicaid’s Position as Payer of Last Resort

Overturning Ahlborn.

For nearly seven and a half years, Medicaid recovery has been limited to settlement proceeds specifically attributable to medical expenses. See Arkansas Department of Human Services v. Ahlborn, 547 U.S. 268 (2006). In an unexpected move, the Bipartisan Budget Act of 2013 (H.J. Res 59), which overturns the Ahlborn decision by amending the Social Security Act, was enacted by Congress on December 18, 2013 and signed into law by President Obama on December 26, 2013.

Section 202(b) of the Bipartisan Budget Act of 2013 directly correlates to Medicaid recovery in personal injury settlements and awards received by Medicaid recipients. The changes are designed to extend Medicaid recovery and assignment of rights to payment beyond the traditional payments by a third party for “health care items or services” and “medical care” by expressly permitting recovery from “any payments” made by a third party.

While Congress estimates the changes made pursuant to Section 202 will save $1.4 billion over the next ten years, many practitioners fear that the legislation may have a chilling effect on Medicaid recovery. Specifically, it is believed that an injured Medicaid recipient’s recovery will be reduced as a result of (i) costs associated with increased complexity of settlements and (ii) Medicaid’s entitlement to full satisfaction of its lien against settlement proceeds beyond those allocated for medical expenses. This decreased recovery may discourage or bar a Medicaid recipient from pursuing litigation for injuries sustained, thereby resulting in Medicaid’s inability to recover any funds expended on behalf of the Medicaid beneficiary.

The amendments to the Social Security Act are set to go into effect on October 1, 2014, but it is expected that the changes will be lobbied against. It is also believed that elder law attorneys and special needs planners will serve an integral role in sorting out whether the effective date will apply to date of settlements and awards, or whether it will be limited to Medicaid enrollment date.


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The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

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