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Medicaid estate recovery can affect beneficiaries’ estates

On Behalf of | Dec 23, 2011 | Medicaid Planning / Nursing Home Planning |

Our readers are likely not aware of the Medicaid Estate Recovery process. Medicaid Estate Recovery is something you should be aware of as part of your Medicaid planning. The term refers to a process initiated by state governments in order to recover payments made under the Medicaid program from estates that are able to pay.

The recovery process-which is authorized by the federal government under the Medicaid program-is initiated against the estate of a deceased Medicaid beneficiary. Medicaid beneficiaries are notified of the recovery program during their initial application and for eligibility and annual redetermination process. The recovery process itself is initiated after the beneficiary’s death.

Family members of individuals who have received Medicaid benefits can sometimes face the situation where their loved one has spent down or depleted their funds in order to qualify for Medicaid, and then faces the possibility of estate recovery upon their death. In these situations it isn’t uncommon that the home and a small personal need account are the only remaining assets.

In general, Medicaid can recover benefits against deceased individual recipients who have been permanently institutionalized and have received the benefits while they were age 55 or older.

In terms of the amount recovered, states are required to seek recovery for services provided to a beneficiary at any age in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution. States may opt to recover up to the total amount spent on the individual’s behalf for medical assistance or other services covered under the state’s plan.

Under federal law, Medicaid may recover payments by means of probated assets, including real and personal property and any other resources in which the deceased person has title or interest. Under New Jersey law, written directives may limit Medicaid estate recovery. To know for sure what assets may be eligible for estate recovery, you need to consult recent case law to see what types of assets have been subjected to recovery.

In our next post, we’ll continue looking at this topic. Specifically, we’ll look at general guidelines for when Medicaid will be able to recover on an estate.

Source: nj.com, “Your Legal Corner: The Medicaid recipient and estate recovery,” Victoria Dalton, December 4, 2011.