What Do I Need to Know about Medicaid Estate Recovery?
By Barry Zimmer on October 6th, 2022 in Asset Protection, Estate Planning, Long-Term Care, Medicaid
Medicaid planning should be part of most estate plans given the likelihood that you (or a spouse) will need long-term care and the increasingly high cost of that care. Along with planning to ensure you are eligible for Medicaid if you need it, you also need to understand how the Medicaid Estate Recovery Program could impact your estate after your death. The Loveland area Medicaid planning attorneys at Zimmer Law Firm explain what you need to know about the Medicaid Estate Recovery Program (MERP).
Qualifying for Medicaid
At some point during your retirement years, either you or your spouse may need long-term care (LTC). Nationwide, the average cost of a year in LTC exceeded $100,000 for 2021. Ohio residents paid slightly less (on average) than the national average at just over $98,000 for a year of LTC. Nevertheless, paying out of pocket for several years of LTC could deplete your retirement nest egg. Since neither Medicare nor most basic health insurance policies will pay for LTC, Medicaid may be the only option for help covering LTC expenses.
Eligibility for Medicaid, however, depends on your income and assets. To qualify, the value of your “countable resources” must fall below the program’s limit of $2,000 for an individual. If your resources are valued more than the limit when you apply, your application will be denied, and you may be required to “spend-down” your resources before being eligible for benefits. Understandably, the need to reduce countable resources to avoid the need to “spend-down” assets is what most people focus on when they are working on a Medicaid plan. While it is crucial to anticipate the need to qualify for Medicaid when creating your estate plan, it is also important to think about how Medicaid could impact your estate after you are gone.
The Medicaid Estate Recovery Program (MERP) in Ohio
The purpose of MERP is to allow the individual states to try and recover some of the funds they spend on Medicaid recipients by filing a claim against the estate after the recipient’s death. The Ohio Estate Recovery Program allows the Ohio Attorney General to recover for all medical services correctly paid on behalf of a Medicaid recipient. Medical expenses include those paid for doctor visits, outpatient visits, nursing facility services, home and community-based waiver services like PASSPORT or Assisted Living Waivers, and all medical and prescription-related Medicaid services
The MERP rules allow the Attorney General to file a claim against any real or personal property and other assets that a person had any legal title to or interest in at the time of death. Real property means land, including buildings or immovable objects attached permanently to the land. Personal property means any property that is not real property, including cash, jewelry, household goods, tools, life insurance policies, automobiles, and promissory notes.
Are There Limits to What MERP Can Recover from My Estate?
Certain exemptions do apply when it comes to enforcing the Medicaid Estate Recovery Program rules. Specifically, Medicaid Estate Recovery may start only after the Medicaid recipient’s death and:
- The death of the individual’s surviving spouse AND
- There are no surviving children under 21 years old AND
- There are no surviving children of any age who are considered blind or disabled.
When a family member acts as a caretaker it may also be possible to delay estate recovery if your heirs can prove that allowing recovery would impose an “undue hardship.”
By incorporating a Medicaid planning component into your estate plan you can protect your property now and after you are gone.
Contact a Loveland Area Medicaid Planning Attorney
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about Medicaid planning, contact an experienced Loveland area Medicaid planning attorney at Zimmer Law Firm by calling 513-721-1513 to schedule your appointment today.