What is the Medicaid Estate Recovery Program?

If a person (age 55 or older as of March 1, 2005) of limited income received healthcare services through the government program Medicaid, the state of Texas has the right to ask for money back from their estate once they die. The Medicaid Estate Recovery Program (MERP) facilitates that reimbursement.

The MERP applies only to some of the long-term Medicaid services, like nursing home care, extended in-home services, and prescription drugs supported by Medicaid. It is important realize that the MERP will only file a claim on a person’s estate if doing so is cost effective. The MERP will not file a claim when:

- the value of the estate is less than $10,000;

- there is a spouse who is still alive;

- there is a child under 21 years of age;

- there is a child of any age who is blind or permanently and totally disabled;

- there is an unmarried adult child who lived in the person’s home for at least one year before the Medicaid recipient died;

- the amount of recoverable Medicaid costs are $3,000 or less; or

- the cost of selling the property would be more than or equal to the value of the property.

The state of Texas will also not ask for monetary reimbursement if doing so would cause an undue hardship for the deceased person’s heirs. In order to be granted an undue hardship request, the person’s heirs must ask for it, and provide documentation that proves the hardship. Some scenarios that MERP recognizes as undue hardships occur when:

- the estate property was a family business, farm, or ranch for at least 12 months prior to the Medicaid recipient’s death, and this property is the main source of income for their heirs;

- the estate property produces at least 50% of the heir’s livelihood;

- recovery by the state would affect the property and result in heirs losing their primary source of income; or

- the estate’s beneficiaries would be eligible for public or medical assistance if a recovery claim is collected.

- Other compelling reasons may exist.

More detailed information about the Medicaid Estate Recovery Program can be found at the Texas Department of Aging and Disability Services (DADS) website.

If you need a Texas Estate Planning Lawyer, contact Peterson Law Group.