The Federal Medicaid Estate Recovery program exists for all States. Estate Recovery procedures go into effect once the Medicaid recipient is deceased. The only ways to simply prevent the Recovery process, as I understand it, are to have all the assets in an Irrevocable Trust or to sell the assets 5 years prior to the recipient's death, in most States, at the current fair market value, if sold to a family member.

There are also strategies used by Elder and Estate planning attorneys to protect assets, which can be complex, expensive and time sensitive. One way to think about estate recovery is that Medicaid “loans” beneficiaries financial support for long-term services and supports, and once the person becomes permanently institutionalized or passes away, the interest-free loan becomes due back to the state. However, no mention is made regarding the Estate Recovery Program, when applying for Medicaid.

Medicaid Estate Recovery is not just when a recipient enters a care facility, it applies to all Medicaid payments made for a recipient, over 55 or permanently disabled at any age, and receiving benefits when they die. It can be a very large total, even without any final care facility expenses. If you are low income and eligible for one of the 4 Medicare Savings Programs, you may not be subject to the Estate Recovery Program for those benefits.

There are a few exemptions for spouses, dependent or disabled children and others who lived with and provided support which kept the Medicaid recipient from entering a care facility, and the Estate Recovery would force that individual to seek State financial assistance themselves for housing ,food and medical costs. These are all very limited and decided on a case by case basis by the State and may only postpone the recovery.

In Ohio, up until 2005, the state could only try to recover from probate assets, but in House Bill 66, the definition of “estate” was expanded to include any property in which the Medicaid recipient had any interest at the time of death. This includes assets in a living trust, joint assets, transfer-on-death and payable-on-death assets, and life estates. Wills are disregarded by the State.

 I think Ohio recently announced recovering around 11 million, through the Estate Recovery Program. Just some FYI for those gracefully aging, like myself.😁