Medicaid Estate Recovery: An ACA Horror Story

The Medicaid Estate Recovery Program (MERP) is a federal program that allows states to recover the costs of Medicaid services from the estates of deceased beneficiaries. This program was created in 1993 as part of the Omnibus Budget Reconciliation Act and has been implemented by most states.

MERP has been criticized for being unfair and burdensome to families. In many cases, MERP claims can result in the sale of a family’s home or other assets to pay for Medicaid costs. This can be a devastating financial blow to families who are already grieving the loss of a loved one. It does not make sense for the state to take away the very house or assets that you worked hard for your entire life and leave it for your family.

What are the rules of Estate Recovery?

There are a number of federal rules regarding the implementation of MERP. These rules include:

States are required to provide notice to beneficiaries of their potential liability for estate recovery.
States are prohibited from recovering from the estates of individuals who are survived by a spouse, a minor child, or a disabled child.
States are required to exempt certain assets from recovery, such as the family home and a reasonable amount of personal property.
The family can contest the state’s claim and prove that the estate does not have enough money to pay debts and final expenses.

What Can You Do If You Are Facing an Estate Recovery Claim?

If you are facing an estate recovery claim, you should contact an attorney to discuss your options. An attorney can help you to understand your rights and to develop a strategy for dealing with the claim.

How to Avoid Estate Recovery Claims

There are a number of steps you can take to avoid estate recovery claims. These steps include:

Purchasing long-term care insurance.
Creating a living trust.
Gifting assets to your loved ones.
Spend down your assets to the point of being financially needy.

It is important to note that these steps may not be right for everyone. You should consult with an attorney to discuss the best way to protect your assets from estate recovery claims.

Conclusion

MERP is a complex and controversial program. If you are facing an estate recovery claim, it is important to contact an attorney to discuss your options.