Estate Taxes - An Unintended Consequence of Obamacare
Medicaid began in 1965 as a health insurance entitlement for poor children and their families. Over the past 48 years, the program expanded to include disabled adults and long-term care. Today in the legacy Medicaid, 25% of enrollees are disabled and long-term care adults, but these people account for 75% of the cost of the overall program.
Long-term care is not only expensive, but an increasing number of adults in Washington state use Medicaid to pay for this care. State officials are legally able to recover some of the long-term care costs in Medicaid by taxing the estates of those enrollees.
Obamacare expands the health insurance side of Medicaid to include any adult over the age of 18 who earns less than 138% of the federal poverty level. It is estimated that 280,000 to 360,000 adults will qualify for the new Medicaid program in Washington state.
These adults in the expanded Medicaid will be subject to the existing state estate taxes. (Here) In other words, the state can recover the cost of routine and acute health care for these new Medicaid enrollees by taxing their estates.
This is clearly an unintended consequence of an ill-conceived law (Obamacare) that was designed to expand free health care in the Medicaid program.