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How Does Medicaid Estate Recovery Work?

Long-term care is expensive. For many individuals, using Medicaid to pay for long-term care is the only option. Medicaid can be used to cover a variety of types of long-term care, such as an in-home health aide or permanent residence in a nursing home. Most individuals are aware of the eligibility requirements for using Medicaid to pay for their long-term care, such as the income and asset eligibility requirements for recipients and the requirement that a nursing home be Medicaid-certified in order to use Medicaid to cover its costs. Many individuals do not know much about Medicaid Estate Recovery. By law, Medicaid can seek compensation from an individual’s estate to recoup its costs for that individual’s long-term care.

It is possible to protect your assets or those of your loved ones from Medicaid’s estate recovery program. To learn more, work with an attorney who is well-versed in long-term care planning and other areas of elder law.

How Does Medicaid Recover Money from an Estate?

After an individual over the age of 55 who used Medicaid to cover their long-term care or an individual younger than this who lived in a nursing facility dies, his or her state’s Medicaid program files a claim against his or her estate to recover the amount of money it spent on that individual’s care. Seeking reimbursement for money spent on an individual’s long-term care is required by the Omnibus Budget Reconciliation Act of 1993.

Under certain circumstances, Medicaid may recover money from a trust fund held by the deceased individual.

When is an Estate Exempt from Medicaid Estate Recovery?

There are circumstances that can exempt an individual’s estate from recovery by Medicaid. These circumstances include:

  • If the deceased has a surviving spouse;
  • If the deceased has a child under the age of 21;
  • If the deceased has a blind or disabled child of any age;
  • If the beneficiaries of the individual’s estate demonstrate that estate recovery would cause them to suffer undue hardship.

The procedure for proving this final point varies from state to state. Generally, if the intended recipient of the deceased’s estate would have to rely on government benefits or if the recipient’s livelihood would be affected in any way, such as losing the deceased’s share of a profitable business, the estate may be exempt from Medicaid recovery.

Work with an Elder Law Lawyer in La Crosse

As an individual with power of attorney for an elderly loved one, Medicaid Estate Recovery could be an issue you face after your loved one passes. This, as well as probate litigation and the dispersal of your loved one’s assets to his or her beneficiaries, all fall into the category of elder law. For legal guidance and representation of your interests as you work through these issues, work with one of the experienced elder law attorneys at Moen Sheehan Meyer, Ltd. Contact our firm today to schedule your free legal consultation with a member of our team.

Published April 4, 2016
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