![]() Recoveries may only be made from the estates of deceased recipients who were 55 or older when they received Medicaid benefits or who, regardless of age, were permanently institutionalized. 11 WHOSE ESTATES ARE SUBJECT TO RECOVERY? In 2003, estate recoveries amounted to $330 million, or 0.13% of total Medicaid spending in all states, with individual state collections ranging from 0.0 - 0.64%. 10 However, it is clear that the much-vaunted savings have not become a reality. 9 A more recent study estimates that one state (Nebraska) could increase Medicaid savings fivefold if it adopted all of Oregons estate recovery practices. 8 An extraordinary jump in Medicaid savings was predicted if all states were to follow the Oregon model. Much of the original enthusiasm for mandatory estate recovery was based on the results in Oregon, where estate recovery was implemented in the 1940s as part of a comprehensive program to help senior citizens keep enough money to meet their own needs and protect their assets from unscrupulous uses by others. At a maximum, states may recover any assets of the deceased recipient. At State option, any other items covered by the Medicaid State Plan.Īt a minimum, states must recover from assets that pass through probate (which is governed by state law).Hospital and prescription drug services provided while the recipient was receiving nursing facility or home- and community-based services and.Nursing home or other long-term institutional services.States must pursue recovering costs for medical assistance consisting of: Highlights of the 1993 Estate Recovery Mandate: The main features of the OBRA ∙3 Medicaid estate recovery mandate are described below. Post-death liens prevent the estate from being settled and the property distributed to the recipients heirs before all claims against it, including Medicaids, are satisfied.įueled by well-publicized and well-researched reports claiming that, ∾state recovery programs provide a cost effective way to offset state and Federal costs, while promoting more equitable treatment of Medicaid recipients, 4 Congress included a provision in the Omnibus Budget Reconciliation Act of 1993 (OBRA ∙3) 5 that required states to implement a Medicaid estate recovery program. The 1965 Medicaid law also gave states permission to impose liens on property in the estates of deceased Medicaid recipients. 2 While some of the features of these early programs have been documented, their scope and impact on Medicaid recipients, especially as compared to states without such programs, have not. Twelve states report having had an estate recovery program in effect before 1990 that was based on the original Medicaid law. Since the beginning of the Medicaid program in 1965, states have been permitted to recover from the estates of deceased Medicaid recipients who were over age 65 when they received benefits and who had no surviving spouse, minor child, or adult disabled child. Not surprisingly, a web search on Medicaid estate planning yields thousands of results offering advice on a variety of strategies to qualify for Medicaid while preserving assets and savings for heirs. Unless they are among the minority who have long-term care insurance, individuals contemplating paying thousands of dollars out-of-pocket every month for long-term nursing home care face the possibility of exhausting all available assets and using up their lifetime savings before being able to qualify for Medicaid. It pays nearly half of the total amount spent on nursing homes, followed, respectively, by out-of-pocket funds of long-term care consumers, Medicare, private long-term care insurance, and other public and private funding sources. Medicaid is the largest source of funds for institutional long-term care expenses. In order to fulfill this mission, Medicaid also recovers expenses paid on behalf of recipients from their estates under certain circumstances. Medicaid imposes stringent limits on income and assets of recipients, consistent with its mission to provide a health care safety net for the poor and for those whose personal resources are insufficient to pay the full cost of care. The remaining four briefs address: Medicaid Treatment of the Home Spouses of Medicaid Long-Term Care Recipients Medicaid Liens and A Case Study of the Massachusetts Medicaid Estate Recovery Program. This brief provides an overview of state Medicaid Estate Recovery programs, which enable states to recoup public spending for Medicaid long-term care recipients from the estates of those recipients after their death. This policy brief is one of five commissioned by the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation on Medicaid eligibility policies for long-term care benefits.
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