Medicaid will often pay for nursing home care even for those who have assets that could be used. This is possible because Medicaid does not certain count assets such as a house or car. However, after the recipient’s death, Medicaid can try to collect costs from the deceased person’s estate.
The federal government requires states to attempt to recover costs paid on behalf of those who received Medicaid coverage. All states attempt to recover long-term care costs, including home health services and hospitalizations while in long-term care, and some try to recover regular Medicaid costs as well. Medicaid can recover from a deceased person’s estate and put liens on their property.
States can recover costs from real estate, personal property, and other assets if they are included within the deceased person’s probate estate. A probate estate includes assets that were owned solely by the individual at the time of death where there is no beneficiary or joint owner designated. Joint accounts, payable on death accounts, and contracts that have designated a beneficiary are not included in a probate estate. The state files a claim in the probate estate of the decedent.
The second method for recovering Medicaid costs paid is to place a lien on any real property owned by the person who received Medicaid coverage. When the property is sold, the state can collect repayment from its share of the sale proceeds.
One situation where a state may waive recovery is when the deceased person’s heirs can prove that recovery of Medicaid costs will impose an “undue hardship.” For example, there could be an undue hardship when the deceased person’s inheritors have limited income and the estate is their sole income-producing asset. i.e. a family farm or other family business. The state must notify the deceased person’s inheritors of its recovery rights and allow them an opportunity to claim an exemption from estate recovery.
For assistance with issues involving Medicaid recovery, consult with an experienced estate planning attorney at Weinstein, Chase, Messinger & Peters, P.C. If you need legal advice or support, do not hesitate to contact our firm for a consultation today.