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Question:

Does Medicaid estate recovery only apply to those that are recipients of Medicaid?

Response:

Yes, but it might not always seem that way. Medicaid estate recovery only applies to the estates of those who received Medicaid benefits during their lives. The states must seek recovery for their Medicaid expenses incurred after the beneficiary reached age 55 and for covered nursing home care at any age. States differ in whether they seek this recovery only against the beneficiary’s probate estate (what they own in their sole names) or against all property in which they have an interest, including trust property, jointly owned property or accounts with named beneficiaries. In those states, property that passed to a joint owner or named beneficiary will still be subject to estate recovery even though the joint owner or beneficiary did not receive Medicaid. So it may seem that Medicaid is seeking recovery from non-beneficiaries, but it is only doing so against the deceased beneficiary’s interest in the property.

For married couples, the fact that the Medicaid claim is only against the beneficiary’s estate can mean that the surviving spouse has no repayment obligation. For instance, if husband, Bill, goes to a nursing home and receives Medicaid coverage, but their home is in wife, Helen’s, name, there will be no estate recovery claim against the house upon either Bill or Helen’s death. (However, Helen should change her estate plan so the house does not go back to Bill if she dies before him. If that were to occur and the house ended up in Bill’s name, then it would be subject to the state’s claim for reimbursement.)

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