It’s fun to see someone who got themselves in a hole keep digging deeper.

By way of background, we’ve run some posts highlighting how states can recover Medicaid costs from the estates of people who enroll who are over 55. The clawbacks for the 55 to 65 age group are actually worse than for the elderly who wind up on Medicaid, since states can include all care, while the clawbacks for the elderly are limited to long term care like nursing homes. This is a big deal since in the states that opted for Medicaid expansion, enrollment is automatic if your income is in or falls to 138% of the Federal poverty level.

This is a much bigger issue than it has been traditionally, because Obamacare ended the old Medicaid assets test. If you had more than $2000 in cash or savings, you could not enroll for Medicaid. But now, people who have decent or even high levels of savings but low income (thanks to ZIRP) could wind up enrolled, particularly because disclosure in many states is poor.*

Lambert took Obamacare shill Nancy Metcalf of Consumer Reports to task for dismissing this issue and no joke, claiming this problem would go away once “the public figures out what is going on.” Gee, millions of members of the public figured out that servicers were engaging in all sort of predatory behavior. Guess what? Public ire, bad press, lawsuits, Congressional hearings and new regulatory standards have done nothing to change their conduct. So why should mere public awareness have any impact?

Reader kareninca, who also subscribes to Consumer Reports, decided to tell Metcalf she was not impressed with her advice. Hoisted from comments:

So, I have emailed Metcalf. I am sure it will make no difference, but I did it. Here is a copy of the email: Dear Ms. Metcalf, I have been embarrassed for some years to subscribe to Consumer Reports, because its reviews are so heavily tilted towards products for the wealthiest. Americans who have a typical income get short, or no, shrift. However, your article on Medicaid clawbacks is actually shameful. Consumer Reports has now officially thrown the weakest members of society, under the bus, and shown a total contempt for the vast majority who cannot afford legal advice. It is hard to choose what part of your article is most ugly; this is certainly an option: “But even if your state doesn’t change its mind, there will probably be ways to protect your heirs, according to Morris Klein, a Maryland lawyer who serves on the public policy steering committee of the National Academy of Elder Law Attorneys. Since each state runs estate recovery slightly differently, you should consult an elder law attorney.” I suppose that you think that along with obtaining costly legal advice, a 55 year old who is forced onto Medicaid (and not even given the option of purchasing insurance with the subsidies that the wealthier will get!) should also eat cake (from Whole Foods, no doubt). If you would like to read a good description of just how nasty your article is, here you go: http://www.nakedcapitalism.com/2014/02/consumer-reports-shills-obamacare-pooh-poohs-medicaid-clawbacks-bizarre-assumption-theyll-waived.html#comment-1867479

Yesterday, kareninca gave an update:

More from Nancy Metcalf (of Consumer Reports), and my reply to her. She asserts that literally everyone eligible should sign onto Medicaid, asap: I don’t care whether you think of Medicaid as a lien (which it isn’t in the states that aren’t doing expanded estate recovery) or insurance or simply a direct-pay government benefit, everyone who’s eligible should take it. Lack of immediate and easy access to medical care is simply bad for one’s health. It’s true that you could wait until you were seriously ill, but again using the example of colon cancer, without coverage it’s unlikely someone poor enough to be on Medicaid would get a colonoscopy, a screening test that is highly effective in preventing the development of invasive colon cancer. I also don’t buy the argument that you shouldn’t take Medicaid because the government will stop paying for it at some point. I’ve heard from consumers who want to turn down premium subsidies for the same reason. Take it now, and if it goes away later, well, then you’re still better off than if you never had it at all. Nancy Dear Ms. Metcalf, Your assert a truism: “lack of immediate and easy access to medical care is simply bad for one’s health” – and then infer from that, that everyone eligible should sign on to Medicaid. That is very poor reasoning, and leads you to give poor advice. I am sure that you are familiar with the Oregon Medicaid study. Two years in, the only benefits for Medicaid lottery “winners” were financial and economic. None of their tangible, physical measurements of health improved. The people who “lost” the lottery were getting enough access to medical care, to give them equal physical health outcomes as the winners. So, to the extent that “immediate and easy access to medical care” is required, Medicaid and non-Medicaid recipients both got it in Oregon. It was not necessary to sign on to Medicaid to be in the same physical condition! Where the Oregon Medicaid “winners” benefitted was financially (for now!) and psychologically. Whether their financial benefit will be long-term, is unclear; it will depend on clawback laws, and the situation of the individual. The same is true of their psychological benefits. They were real, but we do not know if they will outweigh the despondency that many people feel, when they realize that anything they own and accumulate, is not truly theirs, but will be clawed back. Also, the people in the Oregon study all wanted to be on Medicaid. We now have people who are being enrolled in it against their wishes – I cannot believe that that is psychologically beneficial for them. You bring up colonoscopies, as an instance of costly medical tests that the person in your example might not decide to pay for. Are you not familiar with the Kaiser Foundation study, re mail in tests? (http://www.mercurynews.com/ci_23416589/kaiser-permanente-research-method-has-potential-transform-u) They are extremely cheap, and they work just as well. Instead of engaging in scare tactics (“If you don’t sign onto Medicaid ASAP you will get colon cancer and die!!!!” is a scare tactic), why don’t you give Consumer Reports readers useful information? I have health insurance that covers colonoscopies. But I plan to use annual mail-in tests instead, for my own convenience and to avoid wasting health care dollars. Also, even a colonoscopy is much, much, cheaper, if you self-pay, rather than letting the insurance company pay a grossly inflated price. Why not help the readers of Consumer Reports, with that sort of information? If the person in your example is rational, using a mail-in kit or having a frugal self-pay colonoscopy could work very well, and allow them to avoid being on Medicaid if they so desire, without detriment to their health. You don’t seem to want people to make educated choices. You want to scare them into signing onto a big program, without having carefully analyzed the benefits and costs to themselves as individuals. This is very much a case where each individual needs to make an individual choice, based on his or her needs and assets and preferences and abilities, after getting useful information, but you don’t want that. Does Consumer Reports think that people are too stupid to make financial decisions? If your recommendations are those of the periodical, then apparently that is the case. Or maybe you just find it too difficult and tedious to help people determine whether their situation makes Medicaid a good or poor choice. Good lord, I have seen mind-bogglingly long and complex articles in CR, that help one determine which cable TV provider is best for whom. But for Medicaid, it’s “just sign on!” You have made a public claim about what you think people should do (“just sign on!”). If you wish to demonstrate moral courage, and give good financial and medical advice, you should at least qualify your claim. If Consumer Reports is to be a credible publication, it needs to be one that is seen as providing useful, unbiased information that people can work with. Karen XXXXX (last name removed for NC post) p.s. I did not claim that the fact that the federal government may stop its generous funding of state Medicaid, was a reason for an individual to not sign on; it doesn’t cut one way or another. It is the case, however, that if/when the funding goes away, and the services go away, the liens will remain, encumbering the assets of those people who have signed on to Medicaid.

p.p.s. Of course Medicaid is not a lien in states that have not extended the program: that is why I wrote “Medicaid in this context”. If people can’t sign onto the program, there is no lien, and there are no clawbacks. That is really irrelevant; we are discussing the problem of estate stripping, and so only Medicaid-expansion states are relevant; bringing up non-extension states is a red herring.

Now some readers may say, “Aha, but colonoscopies are free under Obamacare!” Um, not exactly. The screening part is free, but if they snip any polyps, benign or not, you get charged for that as a therapeutic rather than preventive service. The US is also the only advanced economy where everyone over 50 is urged to get a colonscopy. In other countries, the test is recommended based on your risk factors, and age alone isn’t seen as a strong enough indicator.

But the bigger point for showing this example is that if you have the time and energy, it really is worth it to let various pundits and officials know when it’s clear they are hawking some sort of official party line and how what they have written discredits them. You may not always get the gratification of having them respond, but most writers read reactions to their articles, and in the case of a subscription-dependent publication like Consumer Reports, subscriber reactions are particularly important. And it also sharpens your argumentation skills for dealing with friends, family, and colleagues. We’re all chipping away at a bad orthodoxy, and continued probing will help find the fault lines.

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*This is a simplified discussion; for more detail, see here and here.