These Oregonians cared for their aging parents. The state threatened to take their homes

Jackie Keller scattered the ashes of her stepfather, her brother and her mother at the base of a 15-year-old cherry tree in the yard of her Otis home. All three of them died in the modest manufactured home with pale walls and blue trim.

Now Keller and her Lhasa Apso, Audrey, are its only residents.

“This piece of property is the only thing my family owns. Me and my daughter, which is my family, this is it,” said Keller, who is 65.

But Keller doesn’t know if she’ll be able to keep the house, which first belonged to her mother. She’s mired in a monthslong battle with the Oregon Department of Human Services, which says Keller must pay back $71,734 for the Medicaid-funded health services her mother, Wynne Dilworth, received in the last two years before she died.

The Department of Human Services likely will come after the house, it said in a letter, unless Keller finds another way to make the payment.

Keller and her attorney argue that she should qualify for a federal and state exemption because she spent years taking care of her mother’s medical needs.

Low-income seniors can tap Medicaid to help pay for long-term supports like nursing facilities or in-home care. But rules for who qualifies are strict. And the care isn’t necessarily free. Once those seniors die, the state will nearly always come after any assets they left behind to recoup costs.

But the rules allow some leeway for adult children who acted as caregivers for their parent. If a child moved in with a parent to provide intensive, unpaid care, ultimately delaying the parent’s need to access high-cost Medicaid services, both state and federal rules allow seniors to transfer their homes to that child before they die, leaving them the property in return for their help.

Attorneys say that many eligible caregivers don’t know about this rule until it’s too late. Oregon’s standards for qualifying are stricter than the federal standard, they say, and hard to navigate without a lawyer’s help. And even when attorneys believe a client – like Keller – qualified for the exemption, some say Oregon has tried to take their homes anyway.

Elder law attorneys are urging Oregon lawmakers to make it easier for such caregivers to earn the keys to their parent’s homes in return for their years of help.

These “child” caregivers are often adults over the age of 50, who have given up their own jobs, health care and retirement to care for their parents, attorney Rebecca Kueny said at a legislative hearing in early March.

“The entire goal of this rule is allowing family members to provide care in hopes that it is extending the need and time before we need Medicaid benefits,” Kueny said. “It’s a win-win, really, for everyone.”

Senate Bill 1029, proposed by the Senate Committee on Human Services, would prohibit the state from seeking reimbursement for long-term care from the homes inherited by caregiving children, even if the child inherits the home after the parent dies.

Sen. Sara Gelser Blouin, a Corvallis Democrat who chairs that committee, called it a “common sense” way to ensure that “people can provide care to their loved ones without dooming themselves to a future of poverty and lack of housing.”

The Department of Human Services agrees with the goal of providing “relief to caregiving children,” department spokesperson Jake Sunderland said, though the agency is not taking an official position on the bill.

The department would like to see the bill narrowed to specify that caregiving children can inherit the home, not other assets, Sunderland said.

Currently, Oregon allows low-income seniors to transfer homes to caregiving children without losing their eligibility for Medicaid if that child lives with them and provides evidence they care for the parent at least 20 hours each week for two years, without being paid by the state. But the state has no such rule to allow caregiving children to keep homes they inherit after the parent died.

The state can – and does, lawyers say – come after homes that otherwise might have been safely transferred to a child caregiver, if only they had known about the rule.

Salem attorney Jennifer Smith recently helped a client who had spent nearly a decade taking care of their parent, she wrote in a letter to lawmakers. But the parent didn’t transfer the home before they died, so the state filed a claim against it.

Her client had to look for alternate housing with no recent employment, credit or rental history, Smith wrote.

The rule “perpetuates a cycle of poverty,” Smith wrote, and creates a “two-tiered system, where individuals with the help of an attorney are treated differently than individuals without.”

‘Maybe I’m supposed to be here’

For the first year after Keller moved into her mother’s Otis home in 2017, she slept on a fluffy, beige armchair pushed up against a wall in the living room.

On the other side of the wall was her 60-year-old brother, Mike Alexander, who had been disabled at 17, when he fell from a tree on a job as a trimmer, injuring his spine. The doctors took a bone out of his hip, but as he aged, his nerves regrew, causing “unimaginable” pain, his sister said.

“He would lay in his room and wail all night long,” Keller said.

In the room across from Keller’s sleeping chair lay her mother, who at nearly 80 years-old had ruptured her abdominal aorta. Keller rose frequently to help clean her sheets, while her mother learned to live with an ileostomy bag.

Keller, who grew up in Portland and had spent years in California working for a chain of boutiques, was living in Las Vegas when her brother called to tell her about their mother’s declining health.

“I saw I had to come here, and so I did,” Keller said.

She took over Dilworth’s role as a paid caregiver for Alexander, helping dress his wounds and get him in the tub, taking care of meals and laundry and housekeeping. She cared for her mother without pay. Keller grew closer with her mother as the pair learned how to take care of her condition together, and Dilworth fought through the embarrassment of needing such intimate help, Keller said.

“There were wonderful things and there were really horrible things,” Keller said. “But there was tremendous healing in this family.”

In the summer of 2020, Keller and her family were forced out of their home by the Echo Mountain fire, which burned over 2,500 acres. It came to their driveway, Keller said, but spared the manufactured house with the blue metal roof. The family was evacuated for nearly three months, Keller said, and the experience left them shaken. Shortly afterward, Dilworth transferred the home to Keller, to ensure she would have a stable place to take care of her brother if Dilworth died.

But it was Alexander who died, just three months later. Dilworth was devastated. As was Keller.

“We were like this,” Keller said, crossing her fingers. Her brother was funny and handy, she said. He’d mow the neighbors’ lawns on a riding mower and built their mother an ornate wooden entryway to the back yard.

For the next few years, Keller stayed at her mom’s side as Dilworth’s condition worsened. She started experiencing temporary strokes and had trouble walking. In 2021, she applied for Medicaid services, allowing Keller to quit the job she’d taken to pay the mortgage and get paid to be her caregiver. Dilworth died in 2023, about six months after she took a bad fall, which caused a brain bleed.

“It never occurred to me that I would be the recipient of this home or that people would die here,” Keller said.

Keller decided to stay in Otis. She tried her hand at being a caregiver for other people and started working toward her goal of teaching yoga to veterans with post-traumatic stress disorder.

“I thought, ‘Okay, maybe I’m supposed to be here,’” Keller said. “Maybe this is where I’m needed.”

In June of 2024, after switching the home mortgage into her name, Keller got a letter from the Medicaid asset recovery unit. It alleged that she had “actively concealed” the 2021 transfer of the Otis home and had not disclosed it to the state when her mom was qualifying for Medicaid later that year. Medicaid guards against people giving away their assets for the sake of qualifying – though under Oregon rules, transferring a home to a caregiving child is supposed to be an exception.

But Keller couldn’t claim to be a caregiving child, the state wrote, because the state hadn’t evaluated that at the time her mom qualified for Medicaid. The Department of Human Services questioned whether Keller could have cared for her mother, since she was also being paid to care for her brother. The department planned to reverse Keller’s house transfer or come after her directly for her mom’s Medicaid bills of $71,734, the letter said.

At the advice of a friend, Keller looked for a lawyer and found Julie Meyer Rowett at the Oregon Elder Law office in Portland.

“I didn’t understand, really, what was happening,” Keller said. “ I didn’t understand that it was wrong on different levels. I didn’t understand that it happened to other people.”

Keller doesn’t remember being asked specifically about the home transfer during her mother’s Medicaid intake appointment, which took place over the phone at the height of the COVID-19 pandemic.

Regardless, Meyer Rowett argued in a fiery letter back to the state, Dilworth wasn’t considering Medicaid services at the time of the transfer, didn’t know about Medicaid recovery and did not intend to hide any transfer.

“I cannot emphasize how strongly I feel about the misdirection Oregon is taking in pursuing such an aggressive stance,” Meyer Rowett wrote.

The pair have been fighting the state’s claim for almost a year.

“I really am broken from all of this, to tell you the truth,” Keller said. “It is so emotionally, physically draining.”

Equity concerns

In 2021, a non-partisan federal agency recommended that Congress stop requiring states to collect Medicaid repayment from the estates of low-income seniors.

The brunt of estate recovery falls on seniors with “modest means,” the federal report by the Medicaid and CHIP Payment and Access Commission found. Three-quarters of seniors who qualified for the Medicaid services had a net worth of less than $50,000 when they died. Collecting from modest estates “contributes to generational poverty and wealth inequity, placing particular burdens on people of color,” the report cautioned.

In return, states recoup only about 0.55% of Medicaid spending, it found.

“Though recovery amounts may be consequential for states, particularly when budgets are tight, overall the data do not indicate that the program is having its intended effect,” the report said.

The commission suggested Congress make it optional for states to recover assets and bar them from going after homes that are valued below half of the national home average price or properties like farms and family businesses that are the only income-producing asset of an heir.

Congress has not taken up the commission’s suggestions, though politicians in both parties have proposed bills to end, or limit, estate recovery.

States retain some control over deciding how hard they push to recover assets from the dead, and policies vary from state to state.

A 2024 Kaiser Family Foundation survey found that most states recover assets beyond what the federal government requires. Thirty-two states try to recoup the costs of all Medicaid benefits used by seniors who accessed long-term care, the survey found, Oregon included.

Some states, including Maine, Massachusetts and Nebraska have specific waivers prohibiting recovery from caregiving children, Sunderland, the human services department spokesperson, said. If Oregon lawmakers were to approve something similar, Sunderland said, the federal government would need to sign off on the change.

Between July 1, 2023 and June 30, 2024, Oregon collected $48 million from the estates of 2,200 dead Medicaid recipients, Sunderland said. That represented about 2% of the $2.3 billion state and federal government spent on long-term care for Oregon’s Medicaid patients that year.

However, it’s challenging to say how frequently the state recoups the money from estates that could involve a caregiving child because the department doesn’t track that data.

Meyer Rowett and Lake Oswego attorney Darin Dooley say Oregon is becoming more aggressive with caregiving children. Sunderland, the agency spokesperson, said nothing has changed.

Between Keller’s case and another that Dooley recently settled, the two lawyers see the state trying to reclaim homes that Medicaid recipients had given to their caregiving children before they died – as, the lawyers say, rules allow.

“I don’t believe any other state is seeking to claw back assets that were validly transferred under the caregiving child rule,” Meyer Rowett said. “The state does not have to do this. There’s no federal mandate that they have to pursue this. And so it becomes a policy question: Should they?”

The Department of Justice, which represents state agencies in court, declined to comment on whether it has stepped up estate recovery efforts against caregiving children. The agency is limited in what it can say, communications director Jenny Hansson said, because the Department of Human Services is its client.

Dooley recently helped a family obtain a conservatorship for an elderly woman, granted when a judge agrees a person can no longer manage their own affairs. The court signed off on the conservator’s decision to transfer the woman’s home to her son, who was already living there and had taken care of his mom.

“I thought it was almost a no-brainer” under caregiving child rules, Dooley said.

But when the parent died, and Dooley filed the paperwork to end the conservatorship, the Oregon Department of Justice intervened. It filed a civil lawsuit against the son, Dooley said, trying to move the house back into the mother’s estate, so the state could reclaim $50,000 for the mother’s Medicaid expenses.

Dooley’s client decided to settle with the state out of “frustration, fear and uncertainty,” Dooley wrote in a letter to lawmakers. He sold the house and agreed to give the state $50,000.

“I really, really don’t understand what Oregon (Department of Human Services) is doing. I don’t understand their public policy. I think it’s a bad look for them,” Dooley said.

‘Go down fighting’

Keller decided to fight for her home.

It’s not a mansion. The three-bed, two-bath, 1,300 square-foot house was built in the late 1980s, almost 20 years before her mom moved in. But it’s accumulated decades of Keller’s family’s memories.

It was in the hot tub on the back porch that Keller first remembers thinking that she, her mother and brother could be happy together living in their Otis house. She and Alexander built a set of wooden steps into the tub, since they couldn’t afford a chair-lift to help him get in.

In the yard, the cherry tree that Keller’s mother and stepfather planted – now fertilized with their ashes – is just starting to bud. Alexander’s favorite spruce towers over the gravel driveway.

The state of Oregon values Keller’s house at around $340,000, it told her. She’s on a fixed Social Security income and can’t refinance the mortgage, she said. So if she’s forced to sell, after paying off the mortgage and the Medicaid bill, she’ll be left with just over half of the home’s value to start a new life.

She and Meyer Rowett have argued that forcing Keller to cover the Medicaid bill creates an undue hardship. She’d likely have to apply for subsidized or low-income housing, but the state has an acute shortage of those options, Meyer Rowett argued.

The state rejected that claim. To qualify for a hardship waiver, Keller has to demonstrate she’d likely be eligible for public assistance and become homeless, the Department of Human Services letter said. The state wasn’t convinced of both.

Keller has appealed that decision. She and Meyer Rowett don’t know how long that might take or what the result might be.

But Keller hasn’t let herself get to the what-ifs yet. She isn’t sure what she’ll do if she loses the house and said, “I’ll cross that bridge if I’m there.”

“If it doesn’t turn out completely in my favor, I am in this position to possibly help somebody else,” said Keller, who shared parts of her story with the Legislature, urging lawmakers to stop Medicaid collections against caregiving children.

“So I’ll go down fighting,” she added. “I would like to keep this home.”

Sami Edge covers higher education and politics for The Oregonian. You can reach her at sedge@oregonian.com or (503) 260-3430.