The public often confuses the intention of Medicare and Medicaid.  Medicare is an entitlement and is available to all those eligible regardless of wealth or income (although the amount of premium and tax paid may vary.) 

Medicaid, on the other hand, is a welfare program that is means tested so that only those with certain income and assets are eligible.  Those familiar with LTC planning know about the concept of Medicaid asset recovery and the efforts of states to recover Medicaid nursing homes costs by efforts such as placing liens on houses.

Health care reform places Medicaid as welfare  in a gray area, because now the income limits to be able to qualify for Medicaid health insurance are higher than the past.  Because of this, some Americans who may not consider themselves poor are eligible for Medicaid health care.

Currently, states such as Illinois (which really need the money!) have the power to recover the cost of all medical assistance, including routine care, paid after Medicaid members reach 55.  Some states, such as Oregon and Washington, have limited estate recovery to long-term care only.

Regardless of whether states pursue asset recovery for non-LTC, the conversation has started and the discussion of planning for care will increase for boomers.  Here's a link to a Chicago Tribune article discussing the issue: