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Texas To Take Homes of  Frail And Elderly Who Use Medicaid

Editor’s Note: The Texas Legislature has passed a bill authorizing the seizure of all property in an estate, including homes, to pay the amount of Medicaid provided for patients. This will primarily apply to the elderly who die in nursing homes. It was a provision passed under what many are saying was misleading information from the Republican Governor. The following was written by a state representative who is trying to change this law.

By Ruth Jones McClendon, Texas State Representative, District 10

Special to the San Antonio Express-News

Posted : 07/29/2003 - http://news.mysanantonio.com/story.cfm?xla=saen&xlb=130&xlc=1031857&xld=130 

Texas now has a "death tax" on the low-income citizens of the state. It is a tax on Medicaid patients, and it runs about $50,000 a year. It is payable on the death of the taxpaying homeowner and collectible from the homestead.

This state has the distinction of being the last in the nation to protect the homestead, even through bankruptcy. That is why this tax is so curious.

Texans are slowly learning about this new law, which passed the Legislature last May near the end of the session. One Texan wrote the governor that the law "reminds me of Hitler getting the gold fillings out of the inmates' teeth in the concentration camps before they went to the ovens." Letters like these are starting to come to my office:

"Dear Rep. McClendon:

"My mother is in a Special Care Unit in Mesquite. In 2002, she had a brain tumor and unsuccessful surgery. It never occurred to us that the state of Texas would seize the property of a person whose family were homesteaders and lifelong residents of the state.

"My mother worked for over 35 years, was a legal resident, paid taxes and was a productive member of society for 84 years. When my mother passes away, not only will I lose my mother, but also the place I live and maintain. My prayer is that the Legislature will overturn this law."

The new law directs the Commission on Health and Human Services to tax and collect from the estates of former Medicaid patients the amount of Medicaid they received. All property in the estate is subject to the tax, but the main asset targeted is the person's homestead.

Gov. Rick Perry said there would be no new taxes this year. This one passed and slipped into law very quietly, because the few legislators involved were falsely told that loss of Medicaid funding was imminent if we didn't do it based on a federal law passed in 1993.

That's 10 years ago. There is no pending action against the state, and Texas is not in imminent jeopardy of losing federal Medicaid funding. There are many federal mandates that we have not complied with, so this is no exception.

Actually, I asked the Texas Commission on Health and Human Services for all correspondence they had received from the federal government on this issue and was given two letters, dated April 1995 and April 1998, neither threatening federal funding.

At the time when very wealthy families are realizing substantial estate tax savings, people of more modest means who require long-term care will have their estates seized. Unlike our wealthy citizens, most of the frail and elderly will not be able to pass their property to their heirs.

This is not a good way to raise money, and is just hard-hearted and mean-spirited.

The wealthy are able to hire attorneys and protect their assets. The poorer do not have this luxury, and they often get ensnared in the clutches of government regulations that the more fortunate are able to avoid.

I have filed HB 28 to repeal the Medicaid Estate Tax law. I would like the Legislature to step back and take a careful, considered look at this issue and act only after getting full input from the citizens. This can be done during the next 18 months.

Our elderly citizens deserve at least this much attention and respect.