Following the death of someone who was receiving Medicaid, each state is required to try to recoup from that person’s estate any long-term benefits it expended for that person’s care. If the person was 55 years or older, states must try to recover payments from the person’s estate for expenses such as nursing home services and prescription drugs. Recovery of payments for the remaining Medicaid services provided to a Medicaid recipient is also available to the states.

Exceptions to Medicaid Recovery

An exception to recovery of payments is Medicaid cost-sharing paid for beneficiaries of the Medicare Savings Program. Other exceptions include cases where the Medicaid recipient’s spouse is still alive, or the child of the deceased is under 21, or blind or disabled.

Probate and Non-Probate Assets

There is a difference in the rule for recovery of the Medicaid recipient’s probate assets and non-probate assets. States are required to attempt to recover payments from a Medicaid recipient’s probate estate, which includes property that is held only in the beneficiary’s name. However, recovery of payments is optional from a non-probate asset in which the Medicaid recipient had an interest, but which passes to the beneficiaries without the need for a probate proceeding.

Upon the death of a Medicaid recipient, the home in which he or she resides is likely to be the sole probate asset of significant value. The home is, however, out of reach of the state if it is not among the recipient’s probate assets, and the state has chosen to exclude non-probate assets from its recovery.

Lien on Real Estate

Further rules apply when a Medicaid recipient owns property. In this case, the state Medicaid agency is required to place a lien on any real estate owned by the Medicaid recipient while he or she is still living unless there are dependent relatives living in the property. Such relatives are limited to the Medicaid recipient’s spouse, a child who is blind or disabled, a child under the age of 21, or a sibling who possesses an equity interest in the property.

If the Medicaid recipient sells the property, he or she will no longer be able to receive Medicaid because cash will have been realized from the sale. In addition, the recipient will be required to pay back the state for any medical coverage received in order for the lien to be removed from the property.

Should I Contact an Attorney?

If you have concerns about recovery of your estate by Medicaid, you should contact a personal injury lawyer, who can help you navigate through the various rules and regulations pertaining to recovery of health care costs.