Will Medicaid Estate Recovery Go After My House and Retirement Benefits?
I am 55 years old and I have been on Medicaid for a few years. I recently read that the state Medicaid agency can seek recovery of any medical expenses that Medicaid has paid for once I turned 55. I own a house, in joint tenancy, with my partner, and have money in retirement accounts with my partner as the beneficiary. I am worried, if I remain on Medicaid and have major medical expenses over the next ten years, that my partner will receive a greatly reduced inheritance, if I die before him. Are my assets vulnerable? Or are they protected since they don’t need to go through probate? Would it be advisable for me to seek health insurance from other means, such as the Health Connector, or find a job that includes health insurance?
If your partner survives you, probably he will not have a problem. In most states, as you suggest, Medicaid estate recovery only applies to probate property. In those states, property that does not pass through probate, such as jointly-owned property or accounts with beneficiary designations, will not be subject to claim upon your death (see What is Probate Property and What Isn’t?) However, some states have so-called “expanded” estate recovery that allows a Medicaid claim against a deceased Medicaid beneficiary’s non-probate assets. Check with your state Medicaid agency or a local elder law attorney to see what property is subject to estate recovery where you live.
Also, beware that not all states permit beneficiaries to hold retirement accounts and receive benefits. Others have different rules before and after age 65 or for benefits while living in the community and for nursing home care, so it may be that when you reach age 65 or if you ultimately need nursing home care, that your retirement plans will have to be spent down.
While it’s always better to have a job or to get health insurance without the potential of an estate recovery claim, that’s only one consideration in your decision. Private health insurance will be more expensive and Medicaid may provide benefits unavailable under private insurance, for instance, personal care attendants if you ever needed assistance with your activities of daily living.