Because Medicaid is a costly government program, federal law requires that every state have a “Medicaid Estate Recovery Program.” That means that after your death, your survivors might have to pay back Medicaid out of your estate for certain services that were provided to you.
Here, we’ll go into just a few of the details pertaining to this program — specifically, what it is and when it might apply to you.
Would Medicaid Require Reimbursement from My Estate?
In order for Medicaid to seek a payback from your estate (meaning any assets you owned upon your death), at least one of the following criteria must be met:
- You were 55 years old or older when you received Medicaid assistance
- You received Medicaid assistance at any age while staying in a nursing home or other long-term care facility
- You received Medicaid assistance while you were the beneficiary of a special needs trust
(Don’t misunderstand that last one — a special needs trust is essential if you want to protect your elderly loved one’s assets while they are in a skilled nursing facility. We can set one up for you!)
One example of the Estate Recovery Program: If David has been receiving Medicaid assistance since he was 39, then when he dies at age 62, Medicaid will request reimbursement for the benefits he received from age 55 until his death.
Another example: Katherine becomes disabled at age 51. Her husband, Michael, decides to move her to a long-term care facility so that she can get the care she needs. Katherine receives Medicaid assistance starting on the date of her disability. Then she dies at age 63, and Michael dies at age 70. After Michael’s death, Medicaid would seek reimbursement from the estate for the medical expenses it covered for Katherine.
For Which Expenses Must I Pay Back Medicaid?
Under federal law, the state of Alabama must be repaid for any long-term care services paid for by Medicaid. That includes any related drug or hospital benefits, as well as cost-sharing payments.
As far as seeking reimbursement for other kinds of payments, the federal government allows each state to make their own choice. Alabama requires reimbursement for all Medicaid services, regardless of whether they are related to long-term care.
Which Assets Could Be Taken for Medicaid Recovery?
The assets belonging to your estate that could be taken for Medicaid recovery may include homes, bank accounts, land, vehicles, household goods, cash, and other assets.
The repayment is made upon your death, and if you didn’t have enough assets to cover what Medicaid paid, then that’s the end of the story — your survivors do not have to pay back the rest of it out of their own pockets.
Keep in Touch with Us for More Information!
We’ll revisit the topic of the Medicaid Estate Recovery Program in the future — there’s a lot more to it, and we want to make sure you are fully informed.
In the meantime, remember to contact Alabama Family Trust for all your Medicaid, nursing home, and special needs trust questions. We can help you protect your loved one’s assets while they are in long-term care, and we treat you like family!