Medicaid is a health program that people ask so many questions about. There are many things people need to know and clarify about the program.
Medicaid is a healthcare program provided by the federal government and managed by the state government. This program provided healthcare for those who earn low incomes, children, nursing home patients, children, and people with disabilities. Medicaid eligibility status differs from state to state.
Even though the healthcare costs are paid for those eligible, the question many raise is: Does Medicaid have to be paid back after death?
Once a Medicaid recipient dies, the federal law specified that the state should recover the long-term care benefits from the recipient’s estate after his/her death: this includes the house that would be sold. Medicaid will recover every cost it paid for including nursing home facilities, prescription, and drugs services, etc.
What Happens When a Person on Medicaid Dies?
Once a person becomes eligible for Medicaid, the state will send the notice stating the rights to recover the medical costs paid by Medicaid after the recipient’s death. This is why a recipient must carry an elder law attorney along while applying for Medicaid.
After the recipient dies, the state will commence its recovery action. Depending on the state Medicaid the recipient is, the estate recovery differs from state to state. But the two ways are the recovery from the estate and the liens on the estate.
Recovery from the Estate
Each state determines what they will recover from the estate of the Medicaid recipient after his/her death. There are two general methods used by the states.
Some states will recover the house, personal property of the recipient, or any asset that is not outside the probate account of the recipient. That is why you don’t need to buy a house while on Medicaid.
This account refers to assets that are owned by the recipient. No joint assets are included in it. While some states acquire every asset that is owned by the recipient, even joint assets or assets that are part of the probate account.
Lien on the Estate
In this case, the state will place a lien on the real property of the recipient while he/she is alive. Once the person dies, the asset would be sold and Medicaid will get its share.
Does Medicaid Have to be Paid Back After Death?
According to federal law, Medicaid has to be paid back after the recipient’s death and they will recover their benefits back.
However, there are ways to prevent this from happening. If you can follow those ways, you don’t have to pay Medicaid back.
- When the recipient has a living spouse or a child that is disabled but under the age of 21, the asset won’t be taken.
- If the recipient also has a living sibling that lived in the house a year before the recipient was institutionalized.
- If the recipient also has a child under 21 years in the house that lived two years before the recipient is institutionalized, the house can not be taken.
Medicaid doesn’t have to be paid back when the family of the dead recipient can prove that the recovery of the asset will cause undue hardship to them. If they are relying on the estate as their source of income, Medicaid can waive the estate recovery.
Can Medicaid Take Your House After Death?
According to federal law, if your house is included in the probate account or a lien is placed on it, it would be sold after the recipient’s death. Also, estate recovery differs from state to state. There are states that only use a year to file for estate recovery upon the death of the recipient.
Therefore, if the surviving spouse is still living, they can’t take the house. Also when the title of the house is solely transferred to the living spouse before the death of the recipient, Medicaid can’t take the house.
There are so many ways to go about it that Medicaid won’t be able to take your house. You need the help of an elder law attorney to guide you through the necessary steps.
Benefits of Being on Medicaid
1. Healthcare Cost Becomes Affordable
Healthcare costs can become burdensome to people especially those who don’t earn much income. Medicaid makes these costs affordable. The money they might pay for the healthcare services would be very little and in most cases, recipients don’t pay at all.
2. Adequate Care
The recipient gets adequate care because he/she is on Medicaid. Instead of going for lower medical care due to low income, they can get the treatment they need. They will enjoy the good care.
3. Reduced Mortality Rate
Inadequate medical care can cause death. People that earn low income won’t be able to survive because they can’t pay private hospital bills. People will continue to lose their lives. But with Medicaid, the mortality rate is now reduced. We now have healthy people in the country.
4. Saves More Money
Since Medicaid pays your healthcare costs, you’ll save the money you could have spent on the hospital bills. Even though you can’t save up to buy a car or house, you will be able to spend your money on other things
Having a good understanding of how Medicaid works will help you to be a recipient and still be safe including your house. Medicaid rules differ from state to state so you must be familiar with the rules of your state. Have an elder law attorney to help through the processes so you won’t lose your home. Moreover, even if you decide to sell your house, Medicaid will know that actually sold your house.