Medicaid Estate Recovery

Medicaid estate recovery is required by federal law (Social Security Act – 42 USC 1396p) as well as by State law (IC 12-15-9).

In cases where a Medicaid recipient dies and has an estate, the State is to file a claim against the recipient’s estate in order to be reimbursed for services it paid on behalf of the recipient when the recipient was age 65 or older.  In addition, the claim includes payments for services provided to a recipient age 55 or older if the services were provided on or after October 1, 1993.  The claim includes the cost of all types of Medicaid services provided to the recipient.

Assets subject to recovery.  All assets in the recipient’s probate estate are subject to recovery.  (Probate is the process by which the real and personal property of a deceased person is distributed to heirs [if there is no will] or to beneficiaries named in the will).  Assets that were exempt (not counted) for Medicaid eligibility purposes may be subject to estate recovery.  Further, some assets outside of the recipient’s probate estate are subject to recovery.

Assets not subject to recovery.

  • Personal effects, keepsakes, and ornaments of the deceased
  • Assets protected by the use of an Indiana Partnership long term care insurance policy

Filing of a Claim.  There is no time limit as to when the State has to file its claim.  However, it is important for claims to be filed in a timely manner.  Most estate recovery efforts do not involve court proceedings.  Court proceedings usually occur for estates valued at $25,000 or more.  The State may waive its claim against a deceased recipient’s estate if enforcement of the claim would result in undue hardship for the survivors.  “Undue hardship” means the survivors would become eligible for public assistance if the State enforced its claim.