What is Estate Recovery?
Medicaid funded long-term care is a unique government program in that it tries to seek repayment for benefits provided. This is known as estate recovery. After the person receiving Medicaid benefits passes away, the Ohio Department of Medicaid adds up the total amount of benefits spent on that individual. It is then turned over to the Ohio Attorney General for collection.
What is Subject to Estate Recovery?
Any assets in which the Medicaid recipient had any legal title or interest in at the time of death are subject to estate recovery. This is usually in the form of “probate” assets. However, Ohio has expanded estate recovery to include “non-probate” assets conveyed to a survivor or to a beneficiary through joint tenancy, contract (i.e. life insurance and annuities), life estates, POD/TOD accounts, living trusts, or other similar arrangements.
Liens Against the Home
The most common asset the state may attempt to recover against is the Medicaid recipient’s home. A Medicaid lien may be placed on the home after the recipient dies. This allows Medicaid to recoup their expenditures from the proceeds of the sale of the home. A lien cannot be placed on the home if it is occupied by the recipient’s spouse or a disabled child.
While the home is an exempt asset for qualification purposes, it is still subject to estate recovery upon the death of the Medicaid recipient.
Surviving Spouse
Whether the state is attempting to recover against the home or another asset, they cannot seek recovery if the Medicaid recipient’s spouse is still living. However, they will attempt to resume estate recovery after the death of the surviving spouse.
Can Estate Recovery be Avoided?
Certain planning strategies can be used to reduce or eliminate the risk of estate recovery. It is important to speak with a qualified Medicaid planner who is familiar with the state’s specific rules and establish a plan before going on Medicaid benefits.
