Medicaid Reclamation claims and Estate Recovery in Michigan
In the case where someone who received Medicaid benefits during their lifetime passes away with probate-able assets, the state may file a claim for reimbursement. The experienced probate lawyers at Thompson Legal understand how serious these claims can be and are dedicated to helping individuals and families navigate the legal landscape surrounding Medicaid benefits and probate estate recovery claims.
Please note that this post is not exhaustive, and every situation is unique. In the event that you have questions about Medicare reclamation claims or your specific case, it’s advisable to speak with an attorney. Contact Thompson Legal to schedule a discovery call with a Michigan probate attorney.
Medicaid and Estate Recovery Overview:
Medicaid is a joint state and federal program that offers health coverage to individuals with limited income who qualify. The federal government mandates state governments, namely the Department of Health and Human Services (MDHHS) in Michigan, to seek recovery from the estates of certain deceased beneficiaries who have received Medicaid benefits.
Who is Subject to Estate Recovery?
Estate recovery applies to Medicaid beneficiaries who are (1) 55 years of age or older, and (2) have received long-term care services on or after September 30, 2007.
What is an "Estate"?
In the context of estate recovery, an estate means all property and assets that pass from a deceased beneficiary to their heirs through a probate administration. This includes any assets that were held in the deceased’s name individually at passing, excluding any pay on death transfers. The most common assets subject to probate estate administration are real estate and financial or retirement accounts. Without an existing beneficiary contract in place, those assets will require probate and therefore may be subject to a Medicaid reclamation claim.
The Estate Recovery Process:
Once an individual who has received qualifying Medicaid benefits has passed, MDHHS sends out a notice to the estate representative or heirs, expressing its intention to file a claim. A questionnaire, determining exemptions, must be completed and returned within two weeks. An undue hardship application may be requested after the questionnaire is returned. If not exemptions or hardships exist, the personal representative must use any non-exempt estate assets to pay the states claim.
Statutory Exemptions and Undue Hardship:
MDHHS will defer recovery if specific individuals are living within the home:
A Medicaid beneficiary's spouse,
A Medicaid beneficiary's child who is less than 21 years old, or
A Medicaid beneficiary's child who is blind or permanently disabled.
Additionally, MDHHS will also defer recovery if one of the following is living in the home:
A survivor who lived in the home and provided care that allowed the Medicaid recipient to remain in their home for at least two years immediately prior to the Medicaid recipient's admission into a medical facility.
A Medicaid beneficiary's sibling who has an equity interest in the home and who lived in the home for at least one year immediately prior to the Medicaid beneficiary's admission into a medical facility.
It is important to note that certain Medicare cost sharing benefits are exempt from Estate Recovery, and that all of the above exemptions are only temporary. MDHHS will only temporarily defer Estate Recovery while the qualifying individual remains in the home. One additional exemption is undue hardship.
Undue Hardship Criteria:
Undue hardship may exist if (1) the estate subject to recovery is the primary income-producing asset, or (2) if the estate is a home of modest value. To qualify for an undue hardship waiver, a means test must be satisfied. The means test ensures that an actual hardship would result from the sale of the estate asset. To satisfy the means test, an applicant must have both:
Total household income of less than 200% of the poverty level for a household of the same size; and
Total household resources of the applicant are less than $10,000.
"Home of modest value" means a home that is worth less than 50% of the average price of a home in the county where it is located on the date the Medicaid recipient died. The average price of a home may be determined from the tax assessment values in the county. A copy of MDHHS’s current Undue Hardship Waiver Application can be found here, or by calling 1-844-TPL-MDCH (844-875-6324).
Voluntary Payment:
After the expiration of the creditor period and completion of a final accounting, personal representatives can voluntary pay MDHHS Reclamation Claims via check made out to:
State of Michigan
P.O. Box 30053
Lansing, MI 48909
Appealing an Agency Decision:
If an agency decision denying an undue hardship waiver needs appeal, a hearing can be requested through the Michigan Office of Administrative Hearings and Rules. This can be done by completing the DCH-0092-Request for Hearing form and mailing to:
Michigan Office of Administrative Hearings and Rules for the Department of Health and Human Services
PO Box 30763
Lansing, MI 48909
Conclusion
The expert probate attorneys at Thompson Legal understand the complexities of Medicaid Reclamation and Estate Recovery claims in Michigan. If you have questions or need assistance, don't hesitate to contact us. The legal advisors at Thompson Legal are here to guide you through the probate process and protect the best interests of you and your loved ones.
FAQs on Estate Recovery:
What is estate recovery?
Estate recovery is the legal process by which the state, through MDHHS, attempts to recover expenses paid for long-term care from the assets of individuals over the age of 55 who received Medicaid benefits.
When does estate recovery occur?
Estate recovery occurs after the death of the person receiving Medicaid long-term care benefits.
What programs does Michigan's estate recovery apply to?
Claims may be asserted for expenses related to Medicaid nursing home benefits, MI Choice Waiver Program, Adult Home Help Services program, and more.
What assets are typically in the estate of a person receiving Medicaid?
Assets in the probate estate of an individual include the home, vehicle, bank account (up to $2,000), and household furniture.
Is there a way to plan ahead to avoid estate recovery?
A comprehensive estate plan is the most effective way to avoid estate recovery, especially if a move to a nursing home is not imminent. Alternatively, personal representatives should consider all available exemptions and deferments.
Transferring assets to avoid estate recovery can impact your eligibility. It's crucial to consult with a legal advisor before any asset transfers, as the law presumes no undue hardship if the hardship resulted from attempting to avoid estate recovery.
This blog is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a probate lawyer about your case Contact Us at (734) 743-1646 to schedule a consultation.
