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Medicaid's Power to Compensate Benefits Paid: Estate Recovery and Liens

July 19th, 2021

Federal law requires the state to endeavour to recover the long-term intendance benefits from a Medicaid recipient'due south estate later on the recipient'due south death. If steps aren't taken to protect the Medicaid recipient'south house, it may demand to exist sold to settle the claim.

For Medicaid recipients age 55 or older, states must seek recovery of payments from the private'south manor for nursing facility services, abode and community-based services, and related hospital and prescription drug services. States besides have the option of recovering all Medicaid benefits from individuals over age 55, including costs for any medical care, not just long-term care benefits.

At that place are a few exceptions. The land cannot recover from the estate of a Medicaid recipient who has a surviving spouse until after the spouse passes abroad. After the spouse dies, the state may file a claim against the spouse'due south estate to recover money spent for the Medicaid recipient's intendance. The country too cannot recover from the estate if the Medicaid recipient had a kid who is nether historic period 21 or a child who is blind or disabled.

While states must try to recover funds from the Medicaid recipient's probate estate, significant property that is held in the casher's name only, they have the pick of seeking recovery confronting property in which the recipient had an involvement merely which passes exterior of probate (this is chosen "expanded" estate recovery). This includes jointly held assets, assets in a living trust, or life estates. Given the rules for Medicaid eligibility, the merely probate belongings of substantial value that a Medicaid recipient is likely to own at death is his or her home. However, states that have not opted to broaden their estate recovery to include not-probate avails may not make a merits against the Medicaid recipient's home if information technology is not in his or her probate estate.

In add-on to the right to recover from the manor of the Medicaid beneficiary, country Medicaid agencies may place a lien on real estate owned past a Medicaid casher during his or her life unless certain dependent relatives are living in the property. The land cannot impose a lien if a spouse, a disabled or blind kid, a child under age 21, or a sibling with an disinterestedness interest in the house is living there.

Once a lien is placed on the property, if the property is sold while the Medicaid beneficiary is living, not but volition the beneficiary end to be eligible for Medicaid due to the cash from the sale, only the beneficiary would have to satisfy the lien by paying back the country for its coverage of intendance to appointment. In some states, the lien may be removed upon the beneficiary's death. In other states, the country can collect on the lien after the Medicaid recipient dies. Check with your attorney to meet how your local agency handles this.

At that place are some circumstances nether which the value of a business firm can be protected from Medicaid recovery. The land cannot recover if the business firm is in the spouse'southward name and the Medicaid recipient relinquished his or her interest. If the business firm is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing habitation resident'south house if they qualify for an undue hardship waiver. For example, if a Medicaid recipient's girl took care of him before he entered the nursing domicile and she has no other permanent residence, she may be able to avoid a claim confronting his house subsequently he dies. Consult with your attorney to discover out if the undue hardship waiver may be applicable.

Last Modified: 07/xix/2021

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