More than 200,000 low-income Illinoisans have applied for new coverage under Medicaid, the state-federal health insurance that was expanded in Illinois and several other states as part of the Affordable Care Act.
But for certain members of that group, the new coverage could come with strings attached.
A little-known wrinkle in the federal health insurance expansion could put at risk the house and other assets of those ages 55 to 64 should they require substantial and expensive health care treatments.
The issue arises because of a provision in the long-standing laws governing Medicaid that compel states to recoup certain medical costs after a person dies, either via liens placed on an individual's home or claims on their assets.
Before implementation of the health care law, colloquially known as Obamacare, only pregnant women, children and those with disabilities qualified for Medicaid.
Further, the asset-clawback provision typically was applied only to people with disabilities older than 55, or those in long-term care, like in nursing homes or other assisted living facilities.
Because Illinois opted to expand eligibility of its Medicaid program to all individuals who make less than about $15,800 a year, a cross-section of relatively healthy early retirees and older workers who unexpectedly lost their jobs and who are too young for Medicare is in danger of getting snagged.
The potential issue applies only to those ages 55 to 64 and newly enrolled in Medicaid, the free coverage paid for almost entirely by the federal government. Those who signed up for private coverage on state-based insurance exchanges are not affected.
Although complaints are mounting from consumers and advocacy groups about ambiguity over how or whether elements of the clawback provision will be enforced, neither the state nor the federal government has provided any clarity, leaving consumers to deal with uncertainty.
"As it stands now, it's hard to say how big of an issue it is, because there are so many unknowns," said Elaine Ryan, a vice president with AARP.
The resulting uncertainty has deterred some people older than 55 from signing up, while others who are enrolled are second-guessing their decision.
"We really hoped for (the government) to clarify this earlier. The concern is that people are hearing these things, like their home might be seized, and they don't go on Medicaid because of that," Ryan said. "The best thing we can say now is, if consumers have concerns, (they should) find out about how your state applies estate recovery."
Even without knowing full answers, policy experts say it's unlikely the states, even cash-strapped Illinois, will go after the assets of Medicaid patients who became newly eligible under the expansion, citing the costs associated with pursuing those assets and the potential political fallout of such a move.
The asset-recovery provision came long before the health care law. It was enacted in 1993 by a Congress worried about rising costs to administer the Medicaid program.
Under the change, states were mandated to try to recover costs from the estates of the deceased who used the program for long-term care, which can cost up to $8,000 a month. States also were given the option to recover other health care expenses, including those for routine medical care.
Several states took that route, including Illinois, which reserved the right to recoup any cash or cost of medical assistance from the estates of those enrolled in the Aid to the Aged, Blind, or Disabled program, a branch of Medicaid.
While Illinois officials said the state does not seize or repossess property from Medicaid patients, it collected $151.5 million from their estates from 2009 to 2014.
Patricia Rosato, of the Rogers Park neighborhood, a 62-year-old retiree with a limited income, was eager to apply for Medicaid when she signed up in December.
After retiring in 2009 from a career as an art professor, she has lived off a meager pension and interest on her savings, making the $557 a month she paid for health insurance a major expense.
Soon after submitting her application, she learned from friends of the possibility that the state may place a lien on her property for any health care costs she accrues during her time on the program.