Did you know that some recipients of Medicaid benefits like long-term nursing care can be subject to the seizure of their assets after they pass away? Under current federal law, each state’s Medicaid agency is required (whether they believe it is necessary or not) to recover money from the estates of deceased long-term care recipients who received funding from Medicaid. That money is then placed in a fund that is used to cover the long-term care expenses of other Medicaid recipients.
What are the effects?
While the implementation of this law varies from state to state, in Pennsylvania, Medicaid recipients over the age of 55 who received funding for long-term care are affected. This means that after they pass away, the Pennsylvania Department of Human Services will receive money from their probate estate (assets in their own name without a co-owner or beneficiary) before it is passed on to any heirs.
If the estate does not contain enough money or assets to cover the deceased person’s debts, the heirs may not receive anything at all. Anything contained in the estate of the deceased person is subject to this law, including their primary residence, bank accounts, and more.
If this process seems unfair to you, you are not alone. Some members of Congress have introduced a bill at the federal level to repeal Medicaid Estate Recovery. This bill titled the “Stop Unfair Medicaid Recoveries Act,” would remove the requirement of states to recover money paid to Medicaid recipients to cover their long-term care expenses. In addition, it would prohibit states from initiating any actions to recover any such money and would require them to withdraw any liens currently in effect.
While Medicaid Estate Recovery was intended to reduce the cost of the Medicaid program, some critics argued that it adversely affected and unnecessarily burdened the poor and disabled, as well as their families.
Congresswoman Jan Schakowsky of Illinois, who introduced the bill said, “Imagine losing a loved one and putting them to rest, only to have Medicaid come knocking on your door demanding you now pay for the long-term care your departed relative received – an amount that has reached, in some cases, hundreds of thousands of dollars. Sadly, too many families experience this traumatic, horrific, and cruel situation all the time. It is a well-kept secret with devastating and shocking consequences to families.”
A number of organizations have voiced their support for the bill, including the advocacy groups Justice in Aging, California Advocates for Nursing Home Reform, and the Western Center on Law and Poverty. If the bill passes, it would be a huge step forward for the rights of families that have lost a loved one who received long-term care funding through Medicaid.
Let A Lawyer Help
At Slutsky Elder Law, we work every day with families and individuals to help them prepare for future expenses like long-term care. If you have questions about long-term care, Medicaid, or anything else related to elder law, we have the answers you need.
With proper planning and the advice of a Medicaid attorney in Montgomery County, PA, you can prepare for long-term care expenses and protect your assets from Medicaid. Get in touch with us today to request a consultation by calling (610) 940-0650 or by filling out the online form on our contact page.