Medicaid Estate Recovery is an essential topic for anyone who receives Medicaid and their beneficiaries. What is Medicaid Estate Recovery? It is a series of laws penned by the Federal Government that allows the state where the person lives and pays for the long-term costs of caring for that person to collect the monies paid for that care.

In short, Medicaid estate recovery is the state’s attempt to take assets from anyone who is in a position of needing long-term care or has needed long-term care and passed away as a means of repayment for the cost of providing Medicaid-related care. The National Council on Aging sums it up as follows:

One way to think about estate recovery is that Medicaid “loans” beneficiaries financial support for long-term services and supports, and once the person becomes permanently institutionalized or passes away, the interest-free loan becomes due back to the state.” (NCOA)

Not All Medicaid Benefits Are Recoverable

If your Medicaid Benefits come from one of these four sources:

  1. Medicare Savings Programs
  2. Qualified Medicare Beneficiary Programs
  3. Specified Low-Income Beneficiary Programs
  4. Qualifying Individual or Qualified Working Disabled Individual Programs

It is not recoverable under the Medicaid Estate Recovery mandates.

As straightforward as that reads, some issues revolve around how the states set up Medicaid benefits. For example, if your state combines a Medicare Savings Program with Medicaid payments, they can try to recover that money from the estate, including Medicare monies.

That example is why it is essential to hire a knowledgeable lawyer to help set up programs such as Medicare Savings Programs. When set up correctly, the state cannot recover funding from Medicare-related payments. However, they can still try to recover from the Medicaid Estate Recovery but cannot touch assets associated with Medicare.

The Medicaid Estate Recovery Process

Under the Medicaid Estate Recovery laws, the estate of anyone who receives Medicaid benefits is given to the state as repayment of those Medicaid Funds. That can include a family home, savings accounts, and other assets of value. The process occurs before any legal heir receives assets and includes property and valuables held jointly.

There is also a process that protects a living spouse called “Spousal Impoverishment,” which protects a percentage of assets so that the spouse may retain independence.

The Law Offices of Dan Kellogg Is Here To Help!

To learn more about how to protect your estate from legal seizure statutes, such as the Medicaid Estate Recovery program and the benefits of estate planning, reach out to our law offices.

Dan Kellogg has counseled many Kent area residents needing help with estate plans, Elder Law matters, and real estate transactions for 40 years. He focuses on client care and has provided personalized service to clients with a fierce commitment to his community.