Avoid Aggressive Medicaid Estate Recovery

Avon Lake estate planning attorney

Medicaid Estate Recovery Doesn't Have To Be Your Problem

The federal government requires states to have Medicaid estate recovery programs to recoup costs of providing medical care for poor residents, but leaves the particulars up to states. The Dayton Daily News has reported that Ohio is among the most aggressive states in seeking estate recovery, and is in the minority of states that puts liens on Medicaid recipients’ properties.

Policy debate

Estate recovery is carried out through collections by the Ohio Attorney General’s office, but the policy is set by Ohio Medicaid at the direction of the governor’s office.

Ohio law gives the Ohio Department of Medicaid leeway in developing program rules, which have to be reviewed every five years. The agency is currently accepting public comment on program rules.

The goal of the state’s administration is to balance the requirements of the law and make sure it is applied fairly, said Dan Tierney, press secretary for Gov. Mike DeWine.

“It’s obviously a sensitive issue,” said Tierney, adding the state is sensitive to people involved who receive services through Medicaid.

“The public policy that’s been directed is that these have been taxpayer funds expended, and in order to try and keep the program as lean and cost-effective and make sure these services are available for other families who need them and would need those resources to fund that care, certainly that’s the other side of this,” Tierney said. “That has to balance.”

There needs to be a way to reimburse the program, Davis said, but that needs to be coupled with consideration for families and individuals who have worked their lives for their things, such as their homes.

Estate recovery

Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities.

Estate recovery started in 1995, and seeks to obtain repayment of the cost of benefits once a Medicaid recipient dies.  Records show, action is taken involving those who were either permanently institutionalized or 55 years or older.

Some states don’t collect unpaid Medicaid expenses from smaller estates. Estates valued under $25,000 are not subject to recovery in Georgia or Massachusetts while Texas sets the minimum for collections at $10,000, records show.

Ohio is one of the few states that “does not perform a cost-effectiveness test or place any predetermined dollar thresholds or real property value,” according to the 2021 study by the Medicaid and CHIP Payment and Access Commission, a group that advises Congress.

Because of Ohio’s policies, the state collects more from its residents in Medicaid recovery than even much larger states. The national MACPAC study found Ohio’s Medicaid estate recovery program ranked second in the nation behind New York in collections four years ago, bringing in more than $55 million.

Ohio is also among about 18 states that pursue recovery for non-Long-Term Service and Support benefits, according to a federal study. Those benefits include debts from doctor visits, hospital stays, scans and other medical tests, among others, according to the agency.

After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient's care. This is called "estate recovery." For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home.

Joseph L. Motta., LPA Estate planning attorney in Avon Lake, Ohio can help you if you are worried about an estate recovery. We can help minimize the effects to your estate. Some options may include a "life estate" or an irrevocable trust. Contact us today to discuss your specific situation.