Medicaid Estate Recovery: Exceptions

It's not enough to qualify for Medicaid unless you alsomore than a year after the Medicaid recipient spouse,
plan for the possibility of "estate recovery." That'sit will be too late for the state to file its claim for estate
when the state presents a bill to the estate of therecovery.
person who had been receiving Medicaid, for allIf a state can only file a claim when there is no child
Medicaid payments it made on behalf of the Medicaidunder 21, can they wait until the child attains age 21 and
recipient, following that person's death. There are somethen file their recovery claim? Once again, this must
exceptions, however, that prevent such recovery. Let'shappen within the statute of limitations period, assuming
take a look at a few of these.there's not a blanket exemption if there's a surviving
If you were under age 55 at the time you receivedchild under age 21, period.
Medicaid benefits other than nursing home care, thenThere will be no recovery made against the exempt
you will be exempt from estate recovery.home of the Medicaid recipient (i.e., it will not have to be
If you are survived by a spouse, a child under age 21,sold to pay back the state) if
or a blind or totally and permanently disabled
dependent, you will also be exempt from estate1. a sibling of the Medicaid recipient was living in the
recovery. Technically, the federal law states thathouse for at least one year immediately prior to the
recovery can be made "only after the death of thedate the recipient was admitted to the nursing home
individual's surviving spouse." So if, for example, theand who has continuously lived in the house since then,
surviving spouse dies a month after the Medicaidor
recipient spouse, a state could file a claim for recovery2. if there is a son or daughter (of any age) of the
at that time. Many states, however, have taken aMedicaid recipient who was living in the house for at
more liberal reading of this, and so long as there is aleast two years immediately prior to the date the
surviving spouse, no recovery will be made, no matterrecipient was admitted to the nursing home, who has
how long or short the surviving spouse lives. Oncecontinuously lived in the house since then, and who
again, you'll need to check your state's own laws toprovided care to the Medicaid recipient prior to his or
find out which rule applies to your situation.her entering the nursing home which permitted the
Notwithstanding the above, even in a state whererecipient to delay entering the nursing home.
recovery may be made after the surviving spouse'sIf all else fails, there's an exemption against estate
death, there typically is an additional limitation thatrecovery if such recovery would work an "undue
applies to all claims against an estate: all states have ahardship" on the surviving family members. One
statute of limitations that bars claims against an estateexample would be where the exempt asset is a
that are made more than a certain number of monthsworking farm, and a forced sale of that farm would
after the death. In many states, that limit is one year.throw surviving family members out of work.
So, in a state with this rule, if the surviving spouse dies