Medicaid “Estate Recovery” is the name used to describe a claim Medicaid programs make on the estate of a deceased Medicaid recipient. Federal law requires these claims at 42 U.S.C. § 1396p(b). In general terms, the State keeps a running tab of all amounts paid for a long-term care Medicaid recipient. After the recipient dies, the State presents a claim to his or her estate. Federal law gives States the option to limit the claim to the probate estate or to expand the claim to include “any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.” 42 U.S.C. § 1396p(b)(4).
In general terms, estate recovery cannot be pursued until the recipient’s death and the death of his or her spouse. It is limited to the recipient’s “estate” although States have the option to use a probate-only model or expanded estate recovery. It is deferred if certain relatives reside in the home. It is further limited to individuals who received Medicaid and were 55 years of age or older when the individual received such medical assistance, the State shall seek adjustment or recovery from the individual’s estate, but only for medical assistance consisting of— (i) nursing facility services, home and community-based services, and related hospital and prescription drug services, or (ii) at the option of the State, any items or services under the State plan (but not including medical assistance for Medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title). In States where there is a long-term care partnership and the recipient purchased a qualifying long-term care insurance policy, there is usually an estate recovery exemption equal to the amount of insurance proceeds paid by the policy.
Another often overlooked concept that you will likely need a lawyer to help you parse is this: Medicaid does not alter rights created in other laws such as property rights and contract rights, so there may be other laws that limit estate recovery.
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Locating Medicaid Law
Sometimes finding Medicaid law is tough, but we hope to give you resources here. Federal and state statutes, regulations and case law is available to subscribers of LEXIS and Westlaw. The federal statute, which is Title XIX of the Social Security Act, is at 42 U.S.C. § 1396 et seq. (the “Medicaid Act”). The federal […]
Medicaid Estate Recovery is Required
At common law there is no obligation to reimburse the government for financial support and services received while impoverished. When the Medicaid Act was enacted, Congress gave States the option of pursuing estate recovery and, until 1993, estate recovery remained optional. Now, within the parameters of the federal rule, States must pursue estate recovery (1) […]
Structure of the Medicaid Program
“Each participating State develops a plan containing reasonable standards . . . for determining eligibility for and the extent of medical assistance” within boundaries set by the Medicaid statute and the Secretary of Health and Human Services.” Wis. Dep’t of Health & Family Servs v. Blumer, 534 U.S. 473 (2002) (quoting Schweiker v. Gray Panthers, […]
Introduction to Medicaid Estate Recovery
Medicaid, as opposed to Medicare, is a health insurance program, jointly funded by the state and federal governments that pays for health care for America’s poor. See Medicaid Act (Title XIX of the Social Security Act), 42 U.S.C. § 1396 et seq. Not everyone is eligible for medical assistance; only those persons who fall within […]
Idaho Medicaid Agency Sets Aside Deeds to Grandchildren in Estate Recovery Action
In State of Idaho v. Beason, 546 P.3d 684 (2024), the Medicaid agency filed an estate recovery claim in Juanita Gilbert’s estate. she received Medicaid benefits from 1996 until her death in 2015, totaling $137,023.29 and, after she died, the State wanted its money back. Juanita and her husband, Robert, owned real property in Butts […]
Long-Term Care Partnership Policies
Long-Term Care Partnership Policies One example of good planning is purchasing long-term care insurance. The greatest risk to non-taxable estates (those under $12.9 million) is the cost of long-term care. With long-term care insurance, you can shift that risk to an insurance company. A partnership policy is a special long-term care insurance policy that protects […]
SSI Decisions finding no penalty where beneficiary over 65 funds a pooled trust sub-account
The federal Medicaid statute authorizes the use of individual self-settled special needs trusts for individuals under the age of 65. See 42 U.S.C. § 1396p(d)(4)(A). It also authorizes any applicant, regardless of age, to establish a self-settled pooled special needs trust sub-account. 42 U.S.C. § 1396p(d)(4)(C). An open question not addressed in (d)(4)(C) is whether […]
Georgia Medicaid Manual Updated with Transmittal 71
On November 17, 2023, Georgia issued Manual Transmittal 71, updating its Medicaid Manual, making technical changes to the following sections. The following sections were updated: 2054 – Emergency Medical Assistance 2060 – ABD Medicaid Application Processing 2101 – ABD Medicaid Classes of Assistance Overview 2111 – SSI Medicaid 2135 – Hospice Medicaid 2143 – QMB […]
Medicaid Questions: Am I Eligible?
Am I Eligible for Medicaid? Recently we were asked about the following fact pattern. Parent had multiple properties in different counties. More than 60 months ago, parent gave these properties to children reserving a life estate. The question, initially, was whether parent is eligible for nursing home Medicaid. The follow-up question was whether the property […]
IRS says “Wait a Minute” on Stepping-up Basis for Assets in Irrevocable Trust
Until recently, the IRS has said little (if anything) regarding whether assets the beneficiary of an irrevocable trust receives get a step up in basis following the Grantor’s death. With issuance of Revenue Ruling 2023-2, that has changed. The IRS has spoken. In RR 2023-2, the IRS posed the following hypothetical which I’ve edited slightly: […]
