Medicaid Payback Rules Relief
Medicaid Reimbursement
Medicaid strikes both relief and fear in the minds of many people. On one hand, this federal and state funded program can provide you and your family with a financial lifeline when you need it most. On the other hand, the prospect of losing your family home and life savings to the Medicaid Recovery Program can cause persistent anxiety.
Understanding Medicaid and Nursing Homes
Most often, Medicaid recovery is associated with long term case, such as the cost of nursing homes or long term care facilities. This potential recovery is often where confusion begins. The vast majority of long term care facilities, or nursing homes, are privately owned. Therefore, you choose the facility and pay for your care and board. As is usually the case, you get what you pay for. The better the facility, the higher the cost. You must pay for the cost with your available funds.
Medicaid, and its resulting payback program, is the course of last resort. With private nursing homes, you pay first, and when you run out of funds, then Medicaid steps in so that your care is paid for the remainder of your life. However, not all nursing facilities accept Medicaid, and others move you to a less attractive part of the facility once you become Medicaid eligible. So it is essential that you research, visit, and educate yourself on the available facilities, cost and long term Medicaid consequences.
Medicaid Liens
If you are Medicaid eligible, either when becoming a nursing home resident or after you exhaust your funds, Medicaid has a history of placing a lien on your home to facilitate future recovery. This practice is no longer allowed in Illinois, with the passage of Public Act 102-1037, on June 2, 2022.
However, the Medicaid Recovery Program currently includes your home and other assets in seeking recovery after your death. This recovery is the only public benefit program that requires states to seek reimbursement for long term care costs.
Good breaking news is on the horizon. Congresswoman Jan Schakowsky has introduced the Stop Unfair Medicaid Recoveries Act of 2024, to repeal the federal mandate that requires state Medicaid programs to pursue families and estates for repayment of Medicaid long-term care services.
Exceptions to Recovery
To be clear, under the current recovery law, Medicaid will not seek recovery from your family or heirs if:
- 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 disabled under Social Security requirements.
- The value of the estate is $25,000.00 or less.
- The cost of selling the property is more than the property is worth.
- When this would cause an undue hardship for the heirs.
All debts, funeral costs, legal costs, and mortgages are paid before recovery is considered. Your heirs must request an undue hardship waiver, and can do so with this form.
Living Trusts
If you have property, investments, or bank accounts in your name at the end of your life or incapacitation, they risk probate and cybercrime.
- A Will = Probate. The rule is no one can legally sign your name. Therefore, at your death or incapacity, all assets in your name are subject to the complete Probate process, which averages 18 months and is costly.
- Living Trust completely avoids Probate.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents and a Last Will and Testament for guardianship of minor children and to “pour over” any assets still in your name at your death out of Probate.
- Your life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
Contact us today for further information or visit Tuohy Law Offices now.
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TomTuohy.com
312-559-8400
17W220 22nd Street
Oakbrook Terrace, Illinois, 60181
This blog entry is for information and planning purposes. Therefore, it is not legal advice. Please do not use this blog as legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this blog should act or refrain from acting based on any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country or other appropriate licensing jurisdiction.
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