On March 6, 2024 Representative Jan Schakowsky reintroduced the “Stop Unfair Medicaid Recoveries Act.” That means if someone in your family who is age 55 and over and receives Medicaid long term care services, when they die their “estate” must pay back Medicaid every dollar. As some folks say “the government gets your home.”
What is the “Stop Unfair Medicaid Recoveries Act“?
It is a bill in Congress introduced in the House of Representatives by Representative Jan Schakowsky. She is from the Chicago area of Illinois. If passed and became law it would apply throughout the entire country. Its number is House bill 7573.
The Stop Unfair Medicaid Recoveries Act would end the practice of requiring the recipients who received Medicaid long term care services and supports when they were age 55 and over.
The current law requires payback for nursing facility services, home and community-based services, and related hospital and prescription drug services, or at the option of the State, any items or services under the State plan. See 42 USC 1396p(b)(1)(B).
Yes. You can lose your home if you receive Medicaid after age 55.
In Michigan the payback process occurs through probate of the recipient’s “estate.” That means if you have anything that goes through probate, which is the legal process by which ownership is transferred to the new owners. The property that makes up the “probate estate” is subject to being sold and the money used to payback Medicaid. What goes through probate? Any “interest in property” solely owned by the recipient must go through probate. Jointly owned property does not go through probate. Example: Mary Smith is a widow, her husband predeceased her. They jointly owned their home, but now she is the sole owner. The house will need to go to probate to transfer ownership to the new owners. Without a Will providing otherwise her children will be the new owners. But, before they can take ownership the Medicaid bill must be paid back. Since the Medicaid bills are often in the tens and hundreds of thousands of dollars, that means the house is sold and money given to Medicaid – the government.
Some states have expanded estate recovery which means the state will claim against any property the recipient had an ownership interest at death. For example, that includes property jointly held with anybody (with the exception of spouses and dependent children). The most common target is the home and a car. Again, Michigan does not have this expanded Estate Recovery.
Do note that if the recipient had no property, then there is no estate recovery. An example would be a poor senior who lived in a low-income subsidized apartment and whose only possessions were the contents of the apartment.
What Medicaid programs are included in Medicaid Estate Recovery?
The Michigan Medicaid programs included are: hospital; nursing home; Medicaid Waiver also known as HCBS services and MiChoice Waiver; PACE; and in-home help services including Home Help and Home Health. While a recipient is in these plans ALL payments Medicaid makes for hospital, ambulance, prescriptions, etc. are subject to payback and Medicaid Estate Recovery.
Some states have managed care Medicaid. In those states the recipient is subject to the “capitated rate” for payback. A case in California was reported where a fellow joined a Medicaid program, but for years did not need any services. When he died his estate was presented with a bill over $200,000.
Who is not affected by Medicaid Estate Recovery?
Recipients in programs that help pay for Medicare, called QMBY & SLMBY, are NOT included in Medicaid Estate Recovery in any state.
Estate recovery will not apply if a recipient is so poor only have only personal possessions. This would be the case of a low-income senior who lives in an apartment and only owns possessions in the apartment. There is nothing for the state to collect from.
The government will Not demand relatives, including children make payment.
Long-term In-home Child Caregivers – No Estate Recovery. But Medicaid Does Not Tell Them Their Rights.
Almost nobody knows that a caregiver daughter or son who lives in the home and has kept a parent out of a nursing home for at least two years prior to the application for Medicaid, may be given the house. There will be no Medicaid Estate Recovery and Medicaid will not penalize the transfer. See an elder law attorney to learn your rights.
Mistaken question: Why Should Taxpayers fund care to protect kids’ inheritances?
There are two mistaken assumptions in the question. The first correction is that Taxpayers pay the bill no matter what. If recipients have an “estate” that means they paid taxes during their life and while receiving benefits. They had to work to make money to buy their homes. If recipients are in their 70’s and they started working at age 18, then they have been Taxpayers for more than a half century. Finally, taxes are paid on the house until it is sold.
The second mistaken assumption is that money is saved for inheritance. If a recipient has a spouse at home, he or she is still facing expensive aging either in home, in a senior apartment or in an assisted living facility. The large majority of residents in “independent senior living” are folks over age 75 who cannot take care of a home. Rent is expensive.
In the case where the recipient is a widow or widower the fact is nursing homes can be a dangerous place both day and night for the recipient who has no family looking out for him or her. A family member who is the protective patient advocate must be available 24 hours around the clock. If the Medicaid recipient is living at home, Medicaid only pays for basic medical assistance. The recipient still needs additional daily support. This may be provided by private home care agencies at a charge of $30 per hour or more. Or, this valuable assistance may be provided by a family member without any lifetime compensation. Saving money for family is necessary for essential needs of the recipient.
Protecting Inheritance for kids is written in the tax code for Millionaires.
Medicaid estate recovery is in effect an “estate tax.” Millionaires have a $13.2 Million dollar exemption from estate tax in 2024. Medicaid families have $0 exemption.
Get Legal Advice
This article cannot be relied upon for anybody’s particular situation. If you have questions Get Legal Advice.
If you are a low-income person and have a question whether Medicaid Estate Recovery applies to you, GET LEGAL ADVICE. You can get free legal advice through a “legal aid” or legal services organization” for low-income folks.
Need a referral? Give us a call, (248) 356-3500, and we’ll refer you to a respected, ethical Elder Law Attorney who isn’t “in it for the money.”
March 17, 2024 by Jim Schuster
