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Medicaid Estate Recovery – The Facts (Part 1) #MedicaidEstateRecovery

            I got a call the other day from the son of a client.  We had obtained Medicaid for his father, preserving the home and just under $120,000 under Medicaid’s Community Spouse Resource Allowance (CSRA) for his mother.  He called to tell us that Dad just died but he also needed me to ease his concerns after he spoke with the attorney who had prepared his Dad’s will.

            The attorney told him to expect an estate recovery letter from Medicaid and to be prepared that there is the potential for a lien to be placed on the home.  It prompted him to call me for clarification.  In my 20+ years concentrating my practice in the area of elder law, there has always been much misunderstanding and misinformation about Medicaid.  The estate recovery lien is towards the top of that list.

            Let’s first be clear on what estate recovery is.  Under federal and New Jersey law, New Jersey’s Division of Medical Assistance and Health Services (DMAHS) is required to recover funds from the estates of certain deceased medical assistance clients for payments provided on their behalf through the Medicaid program.

            The State does this to attempt to recoup moneys paid out so as to ease the burden on taxpayers.  Not all benefits, however, are subject to estate recovery.  Only benefits received by Medicaid recipients age 55 or older are subject to recovery.

            The caller’s father – our client – was 80 years old when we helped him get his Medicaid application approved.  Still, I told him that his mother did not need to worry about a lien being place on her home.  The attorney he spoke with was incorrect.  Next week I’ll tell you why.