One last dig: Medicaid collects at the grave.

• Author: Siegal, nina
• Position: US requires estates to pay Medicaid back under 1993 Omnibus Budget Reconciliation Act

Margaret Dugger was able to live independently until she was ninety-one years old, thanks to her son Marion, who nursed her through cancer in their home in Chula Vista, California. But in 1985, after Margaret lost her leg to the disease and suffered several strokes, the Dugger family decided it would be best if she moved into a nursing home. A poor family, the Duggers sought public assistance from Medicaid to pay for Margaret's long-term care. They didn't know that accepting long-term Medicaid might mean losing the family home.

Under the Omnibus Budget Reconciliation Act of 1993, every state must try to get money back from the estates of former Medicaid recipients who were in long-term nursing-home care. The Act, which took effect in 1994, also mandated that states seek reimbursement from the property of such Medicaid recipients while they are alive if they are unlikely to return home.

Medicaid, the nation's health insurance program for the poor, is now the only public assistance program in the United States that requires beneficiaries to pay back some of their benefits.

Although states are allowed to seek recovery on any Medicaid funds used for health services, most states go after only those people in long-term care.

For poor people, this is often the final indignity.

Margaret Dugger never had an easy life. Her husband, Raymond, a Navy veteran of World War 1, died at age thirty-five in 1930, leaving her to raise their six children alone. Marion, her first-born son, was slightly disfigured with a harelip and a cleft palate. and when he was ten years old, some kids tied him to a tree and poked his eve out.

"My mother was left a widow with six kids, and a total income of $120 from her husband's Navy pension and his insurance," says Felix E. Dugger, sixty-nine, Margaret's youngest son. In 1938, she bought a modest, three-bedroom, clapboard house near the center of town with all she could scrape together from her savings. She paid $2,500 for the place, a small fortune at the time, especially for a single mother. But she felt secure knowing her children had a permanent home.

In 1951, when all of the other children had moved out of the house, Marion still lived with his mother and worked as a school custodian in Chula Vista. Marion and Margaret lived in the house for thirty-four years.

When Margaret became ill, Marion was by her side. But when her health problems began to worsen at age ninety-one, the Dugger children decided to place her in a nursing home in nearby Spring Valley.

But the cost was prohibitive -- beginning at $2,500 a month and rising steadily. Between her Navy pension and Social Security, Margaret had an income of only $900 a month. Marion, then in his sixties, was also retired and had few savings.

Within six months, Margaret had spent her remaining life savings on the nursing home. She applied to Medi-Cal, California's Medicaid program, for assistance. Medi-Cal accepted her, but she wasn't aware that there was a catch.

Margaret spent almost ten years in the nursing home. She died in 1995 at age 101. A few months later, Marion got a letter from Medi-Cal. It claimed that he owed the state $110,000 for his mother's nursing-home care. And it said that Medi-Cal was going to collect on the assets Margaret had left behind -- namely, the house.

Felix Dugger says he and his brother were shocked to learn that they had to reimburse Medi-Cal. "We had no idea during this whole time that they would come back after she passed away and say, `Now we want our money back,"' says Dugger. "We didn't know it was a loan."

California Advocates for Nursing Home Reform helped Felix and Marion Dugger file a hardship claim, arguing that although Marion is not technically disabled, he simply didn't have the money to pay back the state and couldn't afford to let go of his home.

The state denied the claim because Marion did not meet the criteria for undue hardship. "Mr. Dugger does not need the equity in the real property to provide him with the necessities of life," the estate-claims analyst found.

Felix says Marion lives on no more than $1,000 a month and would have...