Ethan R. Okura  and Carroll Dortch
Hawai‘i Herald Columnists

There have been many political changes in the federal government over the past year. With a Republican president in office and a Republican majority in the Congress, some people are concerned about possibly losing the expanded health care benefits that were provided for in the Affordable Care Act, also referred to as “Obamacare.” One of our clients’ most frequently asked questions of late is: “Will Medicaid go away?”

They are concerned that with a Republican-controlled federal government, health care benefits may be eliminated in order to help balance the federal budget. As an example, the CHIP — Children’s Health Insurance Program — recently ran out of funding. CHIP pays for health care for children in low- and middle-income families. Both Democrats and Republicans have historically supported the program, which pays for the health care of 9 million American children and pregnant mothers. Like Medicaid, CHIP is funded jointly by the federal and state governments, although the federal government pays the lion’s share of the costs.

The legislation would have eliminated federal funding for CHIP on Sept. 30, 2017, unless Congress extended its funding. However, because the Congress has yet to pass a bill to extend it, the federal government will not be contributing any additional funds to the states for program. This has alarmed many people. It doesn’t mean, however, that those 9 million children are currently without health care, as most states have enough funds received earlier from the federal government to continue their programs through next summer. But a few states are being hard hit, namely California and Arizona, which only have enough funding to carry them through the end of 2017.

Thankfully, the Senate Finance Committee and the House Energy and Commerce Committee have already passed bills to renew CHIP funding. However, CHIP funding can only be reinstated if these bills pass through both the Senate and the House and are signed into law by the president.

One of the changes that Sen. Pat Toomey (R-Pa.) is trying to make to the CHIP budget is to bring it more in line with what the various states expect to spend. Since 2009, Congress has spent $42 billion of surplus CHIP funds on unrelated programs. Congress has used this CHIP “overfunding” technique as a “slush-fund” or a “cookie jar,” so to speak, probably because it’s easier to pass a bill that funds health care for needy children than for other less popular programs.

When all is said and done, however, we can’t imagine that Congress will not renew funding for CHIP soon. Besides being a huge political issue that cannot be easily ignored or swept under the rug, the health of America’s children is at stake.

So what does this mean for the Medicaid program?

Among other things, the Graham-Cassidy Bill, the last health care bill the Senate considered to replace the Affordable Care Act, proposed to reduce Medicaid funding and coverage. It did not seek to eliminate Medicaid completely, however. At this point, it doesn’t seem to matter anyway, because Graham-Cassidy — the fourth and most recent version of the bill — was not able to garner enough support from key Republican senators and likely would not have had enough votes to pass the Senate.

It’s impossible to predict what will happen in terms of legislation in the next few months, let alone next year or several years from now. But we can look at history.

Since new laws are rarely retroactive, current Medicaid recipients probably will not lose benefits based on any future changes to the law. Additionally, Medicaid has been around for over 52 years. After all that time, it’s unlikely that it will ever be repealed completely.

Obamacare expanded the Medicaid program to include people who are slightly over the official poverty level in income. Even if Obamacare were to be repealed and the law returned to its pre-expansion rules, the Medicaid program would still be available to cover the nursing home costs of our aging clients who are concerned about possibly needing long-term care in the future.

This highlights the importance of getting your estate planning affairs in order — now more than ever — not only to plan for an orderly distribution of your assets when you die, but also to plan ahead to legally protect your home and other assets from a Medicaid lien and nursing home costs.

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Ethan R. Okura received his doctor of jurisprudence degree from Columbia University. Carroll (Cary) D. Dortch received his doctor of jurisprudence degree from the University of New Hampshire School of Law.

The lawyers at Okura & Associates focus their practice on estate planning to protect assets from nursing home costs, probate, estate taxes and creditors.

This column is for general information only. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estae planning specialist.

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