What to expect when Medicaid pays for your long-term care.
Medicare, which pays for hospital, doctor and medication expenses, does not pay for long-term care. Medicare is an entitlement program that you do not have to pay back. Medicaid funds long-term care services for individuals who meet the qualifying criteria. However, when an individual, 55 years or older, has received Medicaid funds to pay for his or her healthcare, the Department of Health and Welfare, IDHW, is required by federal law to recover the cost of their care through Estate Recovery.
If a married individual, who received Medicaid funds, passes away, IDHW will not make a claim against that person’s estate until the surviving spouse has also passed away. During the surviving spouse’s lifetime, there are no restrictions on how the assets in the estate are used, as long as they are used for the surviving spouse’s benefit, and not given away. In addition, the surviving spouse can continue to live in the house or sell it and make other living arrangements. Whatever is left in the estate when the surviving spouse passes away, is subject to Estate Recovery.
When both spouses have passed away, the Personal Representative of their estate is required to provide written notice of the probate to the Estate Recovery division of IDHW. Estate Recovery is made against real and personal property in the estate. It is also made against property held in a revocable trust or property held in joint tenancy. However, IDHW does not make a claim against the death benefit of a life insurance policy.
There are some exemptions from Estate Recovery. One is, the decedent’s surviving spouse or adult children are allowed to keep any tangible, personal property such as household items, furnishings, automobiles, family heirlooms and personal effects, up to $10,000. Also, if an adult child pays fair market value for any item of property in the estate, they can keep it in the family.
Sometimes, I use this analogy to explain Estate Recovery. When I was in law school, I didn’t have enough money to cover all the expenses, so I took out a student loan. When I graduated, I received a letter from the bank with my loan repayment schedule. Similarly, when a person who received Medicaid “graduates,” or passes away, their estate will receive a claim from Estate Recovery to pay back the money they borrowed to pay for their care.
These are complex laws and regulations. Make sure to speak with someone who has experience in this area before making any decisions.
Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.