Nursing home residents have been hit hard by the COVID-19 virus. Many have passed away. The pain of the loss of a loved-ones can be made worse when the state comes calling upon heirs of the deceased nursing home resident to force the resident's estate to pay for the past nursing home expenses. If a nursing home resident's expenses were being paid by Medicaid, the state is obligated to recoup after death the payments it made on the resident's behalf. The process whereby the state seeks recovery of the deceased nursing home resident's long-term care expenses is called estate recovery. Fortunately, the state is prohibited from estate recovery in many cases. There are important exceptions and rules that allow heirs to not be burdened with the state's recovery against the deceased resident's estate. These rules and processes are complicated. You should consult an attorney if faced with the prospect of the state seeking Medicaid estate recovery.
To understand this issue, a little background on Medicaid is helpful. Let's start with a few basics:
Who does Medicaid cover? Federal law requires that state Medicaid programs pay the long-term care expenses for people who have little income and few assets. Also, Medicaid will cover expenses for custodial care like activities of daily living (dressing, toileting, eating, bathing, etc.) Unlike its cousin, the Medicare program, Medicaid recipients do not have to pay co-payments for their long-term care. And there is no specified time limitation on Medicaid benefits as there is in Medicare.
What is the trade-off? There is a trade-off for receiving Medicaid benefits. Federal law requires the state Medicaid program that paid long-term care benefits to attempt to recover all or a portion of the Medicaid benefits from the estate of the nursing home resident after death.
The state Medicaid program must try to recover amounts Medicaid paid for prescription drug costs and for services provided by:
- nursing home facilities,
- in-home care services, and
- community organizations.
Federal law requires states to enact laws allowing their state Medicaid programs to recover all medical expenses paid to nursing home residents receiving Medicaid benefits.
The exception that proves the rule. As is the case with most rules, the law contains exceptions to the recovery process. Medicaid may not recover from your estate for the above expenses if your survivors include your:
- spouse, until your spouse passes away,
- dependent children under age 21, or
- blind or disabled children of any age.
States also may provide that they will refrain from recovery from estates where recovery would cause undue hardship to the heirs. Louisiana has adopted such a hardship provision in its recovery rules, which are numerous and quite complex.
Medicaid liens. The federal law allows state Medicaid programs to enforce a lien (called a privilege in Louisiana) on the real estate owned by a Medicaid recipient during his or her lifetime. However, the state's lien rights are limited and subject to certain rules and exceptions. Louisiana has a number of important, technical exceptions to the estate recovery rules that work to benefit those seeking to escape the punitive effects of Medicaid estate recovery. Such rules are beyond the scope of this article.
Does avoiding Medicaid estate recovery require an attorney? Louisiana's Medicaid rules do not require you to have legal representation; however, for most people retaining an attorney to navigate them through this financial and legal quagmire is a must. Medicaid's rules are complex. Knowing the rules and procedures needed to protect against Medicaid estate recovery can save you tens of thousands of dollars.
Brown Weimer's attorneys have many years of experience handling Medicaid estate recovery cases and other Medicaid long term care financing and planning issues. You will benefit from the firm's extensive experience in protecting family assets from the state in Medicaid estate recovery scenarios.
If you want to learn more about this topic, we invite you to contact us at (504) 561-8700. One of our experienced attorneys will be happy to talk with you about Medicaid's recovery rules or any related topic. Make us your resource for all your nursing home and Medicaid questions.