Medicaid estate recovery is how state Medicaid programs get paid back for certain care after an enrollee dies. For people who were 55 or older, federal rules require states to seek repayment from the person's estate for nursing facility care, home and community-based services, and related hospital and prescription drug services. States can't recover while the person is survived by a spouse, a child under 21, or a blind or disabled child of any age, and every state must have a way to waive recovery when it would cause undue hardship.
What is Medicaid estate recovery?
Federal Medicaid law (42 U.S.C. § 1396p) requires state Medicaid programs to recover certain Medicaid benefits paid on behalf of an enrollee. The repayment comes from the enrollee's estate, meaning the money and property they leave behind. It doesn't come from family members' own money.
Families often first hear about estate recovery when a parent needs long-term care in a nursing home or at home and qualifies for Medicaid to pay for it.
What costs do states have to recover?
Under federal law, for enrollees age 55 or older, states are required to seek recovery for:
- Nursing facility services.
- Home and community-based services.
- Related hospital and prescription drug services.
States have the option to also recover payments for all other Medicaid services given to these enrollees. The law names one exception: states can't recover Medicare cost-sharing paid on behalf of people in a Medicare Savings Program.
So what a family may face depends heavily on the state. Some states recover only what's required. Others go further.
When can't a state recover?
Federal law says states may not recover from the estate of a deceased Medicaid enrollee who is survived by:
- A spouse.
- A child under age 21.
- A blind or disabled child of any age.
In many states, recovery is put off while these people are living and may start later. For example, a claim can sometimes be made after the surviving spouse dies. Ask your state how it handles this.
What is an undue hardship waiver?
Federal law says states must set up procedures to waive estate recovery when recovery would cause undue hardship. Each state defines hardship its own way. Ask your state Medicaid office how it defines hardship. One example sometimes given is property that is the family's main source of income.
If you get a notice of an estate recovery claim, read it right away. Some states have short deadlines to ask for a hardship waiver. The notice should explain how.
Can the state put a lien on a parent's home?
Federal law says states may place a lien on real property during the lifetime of a Medicaid enrollee who is permanently institutionalized, such as someone expected to live in a nursing home for good. But a state can't do this when any of these people live in the home:
- The spouse.
- A child under 21.
- A blind or disabled child of any age.
- A sibling who has an equity interest in the home.
The state must remove the lien if the enrollee leaves the facility and returns home.