Medicaid wants their money back
Medicaid is a program that pays for healthcare for people with limited income and assets. It helps low-income seniors by paying for services that aren’t covered by Medicare, like nursing home care and personal care services.
If your senior is on Medicaid, you need to know that after their death the state Medicaid program can try to collect money from their estate, which is basically their remaining assets. For many seniors, their estate is their house.
Collecting money pays the state back for cost of the person’s care. It’s called estate recovery.
Why does Medicaid try to take money back?
The federal government has a policy that requires all states to try to recover the costs from people who got certain types of Medicaid coverage during their lifetime.
All states try to recover long-term care costs, like home health services and hospitalizations while in nursing homes. Some states even try to recover regular Medicaid costs as well
How states recover Medicaid costs
Laws in every state is different, but there are basically two different ways to recover costs:
- Asking the deceased person’s estate to pay them back.
- Putting liens on the deceased person’s property so they’ll collect money from the sale of the property.
States can’t always recover costs
In these four cases, states aren’t allowed to recover their Medicaid-paid costs.
- Surviving spouse – The person’s spouse is still living, no matter where they live.
- Minor, blind, or disabled child – There’s a surviving child who is under the age of 21, blind, or disabled. It doesn’t matter where that child lives.
- Sibling caregiver – There’s a sibling who lived in the home for at least one year before the person went to a facility. They continue to live in the home and have partial or full ownership of that home.
- Child caregiver – There’s a child who lived in the home for at least two years before the person went to a facility. They continue to live there and can show that the care they provided delayed the person’s need to go to a facility.
Some people can get recovery waived
States can decide not to try to get their money back when the senior’s heirs prove that taking away that money will cause them undue hardship. That’s usually when the heirs have limited income.
The amount that’s recovered is limited
There’s a limit on how much money the state can recover. States can’t recover more than what Medicaid spent on the senior at or after age 55.
Also, states can’t recover more than what’s left in the estate after other creditors are fully paid. So, if the estate runs out of money, the state can’t get anything else back.
Coming Soon Find out how to protect your senior’s estate from Medicaid recovery