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What Is Estate Recovery And Why Does Georgia Do It?

Estate Recovery is a federally mandated program in every state whereby the states are reimbursed from the estates of deceased Medicaid recipients for long-term care, such as nursing home care or community services provided through Medicaid. By accepting Medicaid benefits, a debt is created on the part of the beneficiary that must be paid through the beneficiary's estate. Funds are recovered from the beneficiary's estate after death, for the cost of the services provided to the beneficiary during his or her lifetime. As Medicaid is a joint federal/state program, the federal legislation required Georgia to enact such legislation if it wished to receive federal funds.

Who Is Affected By Estate Recovery?

Anyone who receives any of the following services paid for by Medicaid:

  • A person of any age living in a nursing home.
  • A person of any age living in a facility or medical institution outside their own family's home.
  • A person, 55 years of age or older, who is in a home or community-based program.
    • For example, a nurse who comes to your home to help you take your medication, or a person who comes to your home to help you with your bathing or to help you get dressed in the morning.

When Will Recovery Begin?

The following rules must be followed before any money can be collected:

  • The person on Medicaid must have passed away and the spouse must also be deceased.
  • The person on Medicaid must not have any dependent children younger than 21.
  • The person on Medicaid must not have any dependent children of any age with a disability.
  • The person on Medicaid must not have property or cash worth in excess of $25,000.
  • Collection will be delayed or waived if the family of the person on Medicaid can show that the collection will produce an undue hardship.

What Constitutes A Hardship?

The Medicaid program will waive or delay a collection if an undue hardship exists. Some of the reasons include:

  • Asset to be recovered is an income-producing farm of one or more of the heirs and the annual gross income is limited to $25,000 or less.
  • Recovery of the asset would result in the applicant becoming eligible for government assistance based on need and/or medical assistance programs.
  • The asset to be recovered is the sole income-producing asset of the Medicaid member's heirs.

What Expenses Must Be Reimbursed?

In accordance with the state's plan, expenses incurred by Medicaid for any service provided in a long-term care facility and for individuals receiving institutional services in the home. Medicaid payments for nursing facility services, home and community-based services, related hospital services and prescription drug services are recoverable.

What Assets Are Considered Subject To Recovery?

Estate includes all real and personal property (e.g. homes, real estate, vehicles, cash and other financial instruments) held individually or jointly. Assets subject to recovery also include property held with a life estate interest.

How Will Medicaid Go About Recovering Assets?

The state has to file a notice of claim against the estate of a deceased Medicaid member. No action to recover can be taken against the estate or heirs until six months after the personal representative or heirs have been notified.

How Do I Apply For An Undue Hardship Waiver?

An undue hardship waiver request may be made within 30 days of receiving the Medicaid's notice against the estate, or upon sale, transfer or conveyance of the real property subject to a TEFRA lien.

What Is A Lien?

A lien means a claim, encumbrance or charge against the Medicaid member's real or personal property on account of medical assistance paid to the member under the Medicaid program. The lien may be placed during life or after the member's death.

Can I Transfer My Assets To Avoid The Estate Recovery Program?

Very possibly; however, this is extremely complicated and should be only after consultation with an experienced Medicaid benefits attorney. Otherwise, you could lose your eligibility for Medicaid for months or years.