Scott Walker’s biennial budget includes “death tax” targeting Medicaid recipients (UPDATED)

Among the little-known provisions of the biennial state budget proposed by Republican Gov. Scott Walker and rubber-stamped by Republicans in the Legislature is a provision buried in the budget that would drastically expand the state’s ability to claim dead couples’ joint property – even if the assets are protected in trusts.

The language is designed to help the state recover Medicaid money spent on a number of long-term care programs, most notably Family Care, which helps keep disabled and elderly people out of costly nursing homes.

It’s unlikely the changes will take effect for months, but attorneys who specialize in elder law say they’re already creating concern among seniors who want to leave property to their children and other beneficiaries. The state has prioritized recovering every dollar spent on Medicaid over families’ well-being, said Carol Wessels, a Wauwatosa attorney and former chair of the state bar’s Elder Law Section Board of Directors.


The provisions would allow DHS to claim property even if it’s not subject to probate, a legal process creditors can use to settle debt after a death, or held in a trust, a financial arrangement in which a third party, such as a bank, holds assets until they’re passed on to beneficiaries. People often use trusts to protect property from probate.

Federal rules also prohibit people from divesting or giving away property to make themselves poor enough to qualify for a long-term Medicaid program. However, the regulations allow applicants to transfer some assets, such as interest in a business, at less than market value without penalty.

The Wisconsin budget eliminates that exemption, which means a Wisconsin resident seeking Medicaid coverage for long-term care would have to sell his or her assets, such as a share of a family business or farmland, for full market value even if it was going to a child.

So there you have it folks…Scott Walker and Republicans in the Legislature are sticking it to the elderly (and their families) even after they’re dead.

UPDATE: In an Op-Ed for the LaCrosse Tribune, Democratic State Rep. Steve Doyle explains just how bad Scott Walker’s Medicaid “death tax” could be for family farmers.

With the new “death tax,” when a family member on Medicaid dies and then their spouse dies, the state in certain cases can go after their farm, their business or their house to recover payment for their long-term health care expenses.

This expansion of the law will punish families who want to transfer the family farm or business if the head of the family is sick or disabled and needs certain Medicaid services.

Here in the Coulee Region, we have many family farms run by parents who hope one day to pass them on to their children. As part of their estate planning, parents often choose to transfer the business for less than market value because their children have earned significant sweat equity in the property and often don’t have enough money to buy the farm at full value.

But what if less than five years later a stroke forces Dad to go into long-term care paid for by Medicaid? Under this expansion, the entire family might be penalized. Dad might not be able to receive Medicaid, and if the farm is still in his name when he dies, the state will be able to take back the amount of money paid for his long-term care. To recover these fees, the state could even foreclose the farm.

What makes this truly a “death tax” is that when Mom dies, the state can move in and seize the farm and even the home.

This expansion of the asset-recovery program takes an onerous situation and makes it even worse. In the worst-possible cases, some desperate couples may choose to get a divorce so that the healthy spouse can safely pass on the family farm to the next generation without fear of foreclosure.

No family should be faced with that kind of decision.


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12 thoughts on “Scott Walker’s biennial budget includes “death tax” targeting Medicaid recipients (UPDATED)

  1. And yet the farmers, whom I’ll wager 90% voted for Walker, will continue to vote against their own economic interests. Just because.

  2. Shush! As soon as Walker realizes that his “death tax” will hurt his base, he will “change the rules” to exempt farmers.

    Hey, don’t laugh; it could happen. Did anyone believe Walker would establish a rule to infringe upon the right of speech, singing, assembly, and petition?

      1. You may be or probably are right.

        I momentarily forgot my definition of Walker as a zealot; i.e., “a person who is fanatical and uncompromising in pursuit of their religious, political, or other ideals.” I cannot recall a single magnanimous or conciliatory act of any consequence by him since elected. Everything Walker does serves his zealous nature or a hyper vanity.

  3. Maybe he’s taking out life insurance like Walmart does on dangerous jobs.

    In 1982 I had to work to pay back benefits after Reaganomics killed jobs. The job was so shoddy a lot of people got hurt,

  4. Scott Walker remembers creating jobs as assemblyman in Wisconsin . It was easy with ALEC. 32000 UNION public sector jobs. It is not as easy this time with out using your tax dollars. Scott Walker has created ALL Wisconsin`s budget problems working for ALEC. In 1997 Walker and Prosser as state assemblymen championed for ALEC with truth in sentencing telling the legislatures it would not cost a dime it was to give judges not parole boards the control over sentencing. Then Walker filibustered to stop sentencing changes after the fact misleading ALL the legislatures. With out the sentencing changes Wisconsin`s prisons quadrupled over night. Most people sentenced to 2 years now had to serve as much as 6o years. As the Wisconsin Budget watch Blog shows . Stopping just a percentage of these long sentences Wisconsin would save 707 million per year. Wisconsin could have free tuition colleges. It shows Wisconsin has wasted 200 billion if you add the numbers to the state budget since 1997. Not including the building new or remodeling of 71 courthouses & 71 county jails & 273 police stations and dozens of prisons 28 billion plus interest. The total is over 70 BILLION plus the 100 Billion spent by social services to support prisoners families because the bread winner was a political prisoner as US Att gen Eric Holder explained. Then farming out prisoners in several states until the courts realized it was not allowed in the Wisconsin constitution. Wisconsin then hired 32000 union public sector workers to fill the jobs housing the prisoners from deputies , judges, district attorneys all owe Walker for creating there jobs. 32000 UNION PUBLIC SECTOR JOBS. This cost taxpayers over 3.8 billion or a half million per day to house these EXTRA prisoners per day in Milwaukee county alone. Wisconsin claims it has 24,000 prisoners compared to Minnesota`s 5500. Wisconsin`s corrections populatition is 104,000 with over 28,000 prisons in Milwaukee county alone . In 1995 Milwakee county had less than 1000 prisoners . Is Scott Walker moving Wisconsin forward ? This your reason for budget problems in Wisconsin. Big spender big government Scott Walker. Why does he not work for the people he is taking his check from the people ?
    Wisconsin Budget watch blog has a great article on this.

    1. Like your energy and take on the situation, but have a small correction in relation to your question near the end of your comment. Walker is working for the people he is taking his check from. And that would be the campaign finance check.

  5. Another example of Walker abuse is the on-going fraud in DHS specifically state employee costs, family care which has bigger more costly fraud rampant within by both providers and members and Day Care and Medicaid, and Food Stamps he wouldn’t have need to recoup funds with a death tax. His choice of cabinet members/secretaries is amazing as related to competence and inability to correct errors in departments. Jerry Person above has done a great job in collecting and providing data on corrections. I suspect we’d see similar illogical,seemingly planned monetary losses across the board. Sure seems to me that Walker is using planned economic destruction trickling down from his powerful financial supporters in destruction not growth here in Wisconsin with use of Cloward and Cloven economic destruction planning. ” Cloward and Piven wrote and published their article which outlined the best way to bring the kind of extreme radical type of social change was to economically destroy America. In their estimation, the plan was designed to overwhelm the system and bring about the fall of capitalism by overloading the government bureaucracy with impossible demands and bring on an economic collapse mostly accomplished by the imposition of a massive welfare system made necessary by a contrived failing economy.”

    1. vocal local you will never know how many Billion walker has stole for ALEC. the ALEC kingpins refuse to release records or any emails from ALEC. This is to protect the big ALEC kingpins who have been working for ALEC for decades. Like david prosser, michael gableman, Annette Ziegler and patience raggensack. It would expose pay to play courts as we have all withnessed. The number one problem in Wisconsin today is Tammy Baldwin now working for ALEC. Baldwin has support US attorney John Vauedruil from Rice lake Wis as a federal judge. This us attorney has operated a protection racket in Wisconsin for over a decade. He is a ALEC member and is the reason walker was never federally prosecuted for lying to congress or campaign fraud, misleading the Milwaukee county board forcing them to have double the guards. This federal district attorney like JB Van Hollen has been caught at a ALEC event with JB van hollen stating they will protect walker. Why would Tammy Baldwin support a ALEC kingpin ? She bad mouths ALEC as she HELPS them. we must weed out these FAKE deomocrats. The next US judge for Wisconsin will be a ALEC Judge filling our jails like walker all for the money.

    2. I understand where you are going with the rant and mostly agree with you. However, in discussing these matters there is frequently confusion generated by the use terms relating to economic theories and/or types of government. Capitalism, free markets, democracy, socialism and other terms, often get used improperly. To the comment here:

      The fall of “capitalism,” is not necessarily a bad thing, see or read anything by Richard Wolff:

      Capitalism by its very definition depends on mass subjugation of human capital (labor), “legalized,” outright theft of natural (resources) capital (for private gain) and hording of financial capital to the benefit of a few and to the extreme detriment of the many.

      Democratically elected government leaders, secretly or openly colluding with a few large private entities (corporate government contractors) to facilitate unfettered capitalism is fascism.

      We just need to be careful in the use of certain terms to bring about the understanding of where we are and what we perceive as being the problems to be addressed.

      Would be happy to have someone restate any of that in simpler terms or comment the next time a similar instance appears in the threads.

  6. I am in Connecticut. All Major cities are COMPLETELY run by Democrats. Our Governor, his administration, and both houses of the State Assembly are COMPLETELY DEMOCRAT CONTROLLED. Our dwindling Congressmen/women Delegation is COMPLETELY Democrat and our 2 Senators are BOTH DEMOCRATS. The point is, Connecticut also recoups taxpayer money from Medicaid recipient estates. So please get off the lies that Republicans are the problem. Democrats never met a tax they didn’t like. Move to Connecticut and live the dream, or stay in Wisconsin and enjoy the benefits of lower taxes.

    1. The republicxans are not to blame. it is the billionaires like david koch that owns people like scott walker. then they do everything they can to hurt the state and the people. Like in wisconsin it is kch contolled and owned. Koch could put an asshole in the middle of the state that would kill hundreds maybe thousands of people and walker and his owned republicans would support it. It is called the Golabic mine. You may have bad democrats but in wisconsin the republicans are killers.

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