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By Ryan McNeill, Attorney at Law

Medicaid Estate Recovery

One of the topics our estate planning and elder law attorneys often discuss with clients is Medicaid planning. While you may think you have saved enough to cover your expenses during your lifetime, situations can change. Long-term nursing care can quickly eat up your assets. If you or your spouse spends an extended time in a long-term care facility, you may end up unable to pay the monthly fees.

There are many rules around your eligibility for Medicaid. There are both income and asset components. In addition, if you are married and your spouse plans to remain in the family home and will not be applying for Medicaid, there are rules to ensure your spouse does not become impoverished. While the numbers can change from year to year, for a single person applying for Medicaid to help pay for a nursing home, their income must be less than the cost of the nursing home (minus a $70/month personal care allowance) and their assets must not exceed $2,000.

What is Medicaid Estate Recovery?

While Medicaid is a federal program, it is managed by each state. States have the obligation to attempt to recover all funds paid out on behalf of the individual who received long-term care. When the individual dies, their estate may receive a bill for the full amount of nursing care paid by Medicaid. The expectation is that any funds or real estate in the name of the Medicaid recipient at the time of his or her death will be paid to the state to reimburse it for the long-term care expenses (with exceptions, of course).

In 2023, the estate recovery amount was raised from $5,000 to $50,000. Prior to this change, if the estate included a vehicle worth $6,000, Medicaid would have pursued recovery of this money by requiring the vehicle to be sold in the estate process to pay toward the outstanding balance. With the increase in the estate recovery amount, if the deceased’s estate is valued at less than $50,000, Medicaid will not spend time trying to recover estate assets. Now, in most cases, recovery will only be applicable if there is land or other higher value real property in the estate.

As always, there are numerous rules and exceptions that impact Medicaid eligibility and Medicaid Estate Recovery. An estate planning or elder law attorney can help you navigate the Medicaid landscape, and can help you protect property, including real estate, that might otherwise be subject to Estate Recovery. Contact us today to make an appointment.

Every situation is different, and the rules can be complex. Speak with a Medicaid planning attorney about your situation to ensure you understand how Medicaid Estate Recovery may impact you and your loved ones. Contact us today to make an appointment.