A topic that frequently elicits questions from clients is the Medical Assistance Estate Recovery Program. There is a lot of information and misinformation out there about the program.

The Medical Assistance Estate Recovery Program is administered in Pennsylvania by the Department of Human Services. The Program allows the Commonwealth of Pennsylvania to be reimbursed for expenditures for certain services provided through Medical Assistance during a person’s lifetime. These services include long-term care facility services and home and community based services provided for recipients that are age fifty-five (55) or older.

When Medical Assistance pays towards the care costs of a person in a nursing facility or at home through a waiver program, the state keeps a record of the amount it paid. During the recipient’s lifetime nothing needs to be done about this amount. However, when the recipient dies the Department of Human Services can assert a claim based on the amount paid by Medical Assistance during his or her lifetime.

The Medical Assistance Recovery Program only applies to certain Medical Assistance Services and only applies to those aged fifty-five (55) or older. Therefore, if a beneficiary did not receive these specified services (typically nursing home or in home waiver services) or was not fifty five (55) years of age, estate recovery will not apply. Additionally, Medicaid should not be confused with Medicare services, which is a federal program that provides health insurance benefits.

The types of assets that Estate Recovery Program can collect against are set forth by statute. Generally, the assets that must be used to reimburse the Department are probate assets. Probate assets are assets that pass through someone’s estate. Examples of probate assets include real estate in the Decedent’s name alone, bank accounts in the Decedent’s name alone, and life insurance payable to the Decedent’s estate. Non-probate assets are not currently subject to the Department’s claim. Examples of non-probate assets include property held jointly with right of survivorship with another person or persons, property held by irrevocable trusts, and property that passes to a named beneficiary, such as a life insurance policy death benefit.

In order to qualify for Medicaid a person’s assets must already be at a very low level. So how does the Department receive anything back on its claims? The Department typically receives funds from assets that are not counted in qualification determination during lifetime. The largest of the assets not counted for qualification purposes is a person’s home. Therefore, while someone may qualify for Medical Assistance to pay for care during his or her lifetime and own a home, to the extent that the home is in the recipient’s name after passing, there can be a claim placed against the home when it is in the recipient’s estate.

It is the duty of the person administering a Decedent’s estate to request the claim from the Department of Human Services. The next-of-kin usually receives an inquiry from Medical Assistance as to a recipient’s assets after a recipient’s passing.

It is important to understand how and when the Medical Assistance Recovery Program may apply to your loved one’s situation. You should consult with an experienced elder law attorney who can discuss possible legal options before passing in order to minimize estate recovery implications. Marshall, Parker & Weber can also assist a personal representative in responding to claim information and asset requests to prevent ongoing estate recovery lien issues.

Marshall, Parker & Weber is open and available to help you assess what documents you may need or whether your current plan is in good shape. Call us at 800-401-4552 to schedule an appointment. You can also check out our portal for complimentary blog articles, videos and webinars.
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