Connecticut officials are scaling back the circumstances under which the state can seek repayment from the estates of Medicaid recipients when they die.

The move addresses what some state and federal officials believe is a barrier to getting Medicaid-eligible people to sign up for the program under the federal health law commonly known as Obamacare.

But the change affects people in only one portion of the program and leaves adults who received Medicaid-funded services before this year subject to having their estates docked for repayment.

When some adult Medicaid recipients die, the state seeks money from their estates to repay the cost of their care.

Under the previous policy, the state sought repayment for two types of care received by Medicaid clients: long-term care provided in nursing homes or home- and community-based settings, and any medical services received at age 55 and older.

Now the state Department of Social Services has suspended efforts to recover money spent on medical care for some people aged 55 and older — as long as the care was not related to long-term care. The suspension is intended as an interim step while the department formally changes its policy.

The change applies only to people in the HUSKY D Medicaid program, which covers adults who don’t have minor children. HUSKY D was created in 2010 when the state expanded Medicaid as part of Obamacare, and it covers more than 127,000 people.

In addition, the change applies only to care received after Jan. 1, 2014. That means that people  55 and older who received Medicaid-covered care before this year would still be subject to having their estates repay the cost of their pre-2014 care.

Social Services Commissioner Roderick L. Bremby described the changes in a recent letter to the co-chairwomen of the legislature’s Appropriations Committee.

Federal law requires states to recover Medicaid funds spent on long-term care for people aged 55 and older, but some states, including Connecticut, seek repayment for additional services.

State and federal officials have raised concerns that some Medicaid-eligible people have avoided enrolling in the program because they don’t want their estates to be docked to repay the cost of their care when they die.

In February, a federal health official indicated that the federal government intended to consider options for eliminating the recovery of Medicaid benefits. Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, cited “the potential barrier to enrollment that future estate recovery may create for some individuals.”

State Healthcare Advocate Victoria Veltri has raised similar issues, and U.S. Rep. Joe Courtney, D-2nd District, expressed concerns to DSS that the previous recovery policy could hurt enrollment in the expanded Medicaid program.

DSS spokesman David Dearborn said this week that the change is in line with federal guidance, and cited the potential for recovery to deter eligible people from Medicaid, even though one of the major goals of the federal health law is to cover the uninsured.

In addition, since the federal government is reimbursing the state for all of its HUSKY D costs through 2016, having state employees spend time pursuing recoveries that are not federally required did not seem as productive as pursuing repayment for care that the state has partially funded, Dearborn said.

Last fiscal year, the state Department of Administrative Services recovered approximately $15 million related to Medicaid payments.

Overall, more than 659,000 Connecticut residents are covered by Medicaid. The change does not apply to adults in HUSKY A, which covers more than 445,000 low-income children and their parents.

Medicaid recovery: A guide

Who is still subject to estate recovery:

• Adults in HUSKY A or HUSKY D of any age who receive long-term care, such as nursing home care or home- and community-based services. The recovery can include the cost of related hospital and prescription drug services.
• Adults in HUSKY A aged 55 and older who receive medical services.
• Adults in HUSKY D aged 55 and older who received medical services paid for by the program before Jan. 1, 2014.

In these cases, the state would seek repayment from the estate of a Medicaid recipient after he or she dies. If the person is survived by a spouse or child under 21, the state’s claims would be delayed until the spouse dies and the child turns 21.

Who is no longer subject to estate recovery:

• People 55 and older in HUSKY D who receive medical care on or after Jan. 1, 2014 (if the care is not related to long-term care).

Recovery while alive:

There is one circumstance in which the state can seek repayment from a HUSKY client while living: if a person receives Medicaid coverage for injuries sustained in an accident and receives a financial settlement related to the accident. In those cases, the state can seek reimbursement for accident-related bills.

In addition, a separate set of recovery rules apply to people who received care covered by SAGA medical, or state administered general assistance, which was converted to HUSKY D in April 2010. People who received SAGA medical coverage are subject to more state recovery efforts, including having the state place a lien on property or make a claim against any inheritance they’re slated to receive, lottery winnings or any other windfall.

The HUSKY alphabet

What about the other HUSKY programs?

HUSKY B covers children whose parents earn too much to qualify for Medicaid. There are no adults in the program, and members are not subject to asset recovery.

HUSKY C covers poor seniors and people with disabilities. Unlike the other HUSKY programs, a person’s assets are taken into account in determining eligibility and people who qualify have limited assets.