Medicaid Recovery

06/28/2012

When a person who is receiving Medicaid benefits to pay for long-term care dies, federal law requires the state where the deceased recipient lived to seek reimbursement from the deceased recipient's estate for the cost of services rendered. This is known as "Medicaid estate recovery."

Generally, Medicaid estate recovery applies to two groups of people.  The first group consists of people over age of 55 who received Medicaid assistance.  The second group consists of permanently institutionalized people who received Medicaid assistance, regardless of age.

It is important to note that each state, including Missouri, has its own rules with regard to which assets of the deceased Medicaid recipient will be subject to Medicaid estate recovery rules. For example, some states may completely exempt a primary residence from recovery, while other states may completely exempt property that passes outside of probate from recovery. Therefore, it is essential to understand the Medicaid estate recovery laws of your state or the state where your elderly parents live since these laws vary from state to state.

However, with so many states hurting economically, it should not be surprising that more and more states are becoming aggressive in their efforts to get repaid from the estates of deceased Medicaid recipients. Therefore, proper planning is essential in order to avoid the so-called e tax is waged in Washington, the fact is that the vast majority of the population "Medicaid death tax" established under estate recovery rules.