How does Medicaid get paid upon the death of a spouse?

Spouse One qualified for Medicaid and went into nursing home care. Spouse Two remained in the home. Spouse One died in 2007. No claim was made by Medicaid but no probate of Spouse One's estate was done. Spouse Two died in 2015, having been on Medicaid for two years. Medicaid was notified then to see what their MERP claims would be on both spouses. Spouse One had a claim of $13,500 and Spouse Two had a claim of $23,700. We have argued that the claim one Spuse One should drop off because when he died, there was a spouse remaining in the home. For some reason, the MERP contractor on Texas, HMS, has sent a new claim for $41,000 on Spouse Two. Could they aggregate the claims of Spouse One and Spouse Two?

Peggins - this is going to be long…..Medicaid probably isn't going to go after the house unless you apply for Medicaid sometime in the very near future. You are the "community spouse" and as such can continue to live in & keep the house from now till forever & you can sell the house later on too. But you need to make sure to get the paperwork so that your hubby's Medicaid MERP never comes into play as a claim or lien on the house.

If in the future you want to downsize & get a condo or move to another state to live by kids, or move to Morocco, you can do that. Medicaid cannot force you to keep the house or control your asset. But again you need to do some paperwork to ensure this and not have to pay back. At 61 you easily have another 3+ decades!

When hubby dies, your state's MERP will send you a letter. It may not come in the DHHS envelope that other Medicaid notices came from either. Many states are outsourcing MERP so it comes from the contractor. The letter will likely get sent to whatever address the state Medicaid program has as their contact address for the Medicaid recipient & then some states also send it to the property address that the MERP claim or lien could be on. The letter comes out about 3 -8 weeks after death and says something like…."We are sorry for the loss of your family member…the state paid $ 125,696.34 for his care under Medicaid and we fully expect to be reimbursed for these costs…" It is NOT a warm & fuzzy letter. It usually induces panic within family as most are totally unaware at the huge cost that a NH or other Medicaid paid stuff really truly runs. Anyways, somewhere within the not warm & fuzzy letter there should be a statement that if there are any exemptions or exclusions to the state's MERP claim you need to either let the state know in writing or you have to file the exemption or exclusion within the timeframe stated in the letter. This seems to be 30 days but whatever it is you HAVE TO get the exemption/exclusion response back asap. Personally I would send it back certified mail or via Fed Ex so you have a documented paper trail. If you don't, then the states now seem to take the position that it's valid and it can be turned over for a claim or lien to be placed on the property or for debt collection (depends on your state laws on property ownership, probate, death).

If you are the surviving spouse, that is it's own exemption to MERP. Medicaid has all this info and knows there is a spouse but nevertheless you have to do the MERP follow-up. Then once MERP gets that, they are required to evaluate the possible claim or lein (do a cost benefit analysis) and almost always will release the claim if there is a surviving spouse. The only ones I've heard about that don't get released are when the homesteaded property has a tax assessor value of over 500K or 750K - most states have a homestead exemption value limit for individual Medicaid applicants BUT for couple's the homestead can have any value if one spouse is a "community spouse" under Medicaid's definition. But once they die the excess value of the homestead is non-exempt and subject to MERP. Yeah it's so totally frickin' confusing…..for example, if you are in TX the max value for home is 500K for solo Medicaid applicant, so if house has tax assessor value of 640K they can't get Medicaid as house value is 140K too high BUT if they are a couple the value on the home can be beyond that. So 640K if there is a community spouse is OK but only the 140K is the exposure for MERP. It does make sense to do this as the community spouse can sell, pay MERP 140K and still have lots of $$.

I would imagine your home is below 500K so you will never have to deal with particular hot mess. BUT - this is important - you nevertheless need to make sure that you get whatever original document from the state that is valid in your state that show a release of MERP. In my mom's state (TX) it is a 1 page 2 section "Authorization and MERP Certification", that lists the estate # and cause # as the property is a claim that has to be dealt with in traditional probate or as a Muniment of Title action via probate court in TX. I've seen another for another state, that just was on state letterhead with the parcel number and tax assessor description within the letter that reads the state has no claim on the property. None of this stuff is ever uniform as each state runs Medicaid by it's own rules but under an overall federal guideline. Just loco but whatever…..In order to later on sell or transfer the property with out issues or a cloud on the title, you need to attach the release of MERP letter either to the title company &/or to the act or sale on the property or whatever you have to do for property sales in your state. I bet in some states, you can take the MERP certification release and file it at the courthouse to accompany all legal on the parcel so that it is there for any future legal on the property.

It is good you are thinking about all this now as the state's MERP stuff is very, very time-sensitive and you have to do whatever and respond within the days indicated in the letter. I imagine that just so many families are still so bereaved from the loss of their loved one that they just ignore the MERP letter and then the state does the required claim or lien on the property which will be a clusterF later.
Good luck & keep a sense of humor in all this!

egoodson - Medicaid is not in the real estate business. Medicaid is not going to take the house & land. The Dept of Health & Human Services which run Medicaid in your state is not set up to this either.

HOWEVER... Medicaid requires that in order to qualify for Medicaid, the applicant have to be "at-need" both medically and financially. "At-Need" basically means that they are impoverished. Most states have impoverishment set at $ 2K in monthly income and 2K in total nonexempt assets.

If they have a home that was their homestead, and they have any intent to return home, then the home can be a exempt asset. But the elder will not have anymore of their income (like their SS) to pay for anything on the home as they are required to do a co-pay to the NH of their monthly income. This is if the elder is a widow or widower so no spouse still living in the house. So somebody else in the family will have to pay for everything on the home from now till forever PLUS the home will have either a possible claim or lien on the property for Medicaid Estate Recovery (MERP) after they die. Most families decide to just go ahead and sell the house and use the proceeds from the sale to pay for care and do a spend-down to get the elder to qualify for Medicaid. The family puts the house up for sale as they can't afford to private pay for care.

But you do not have to sell the homestead if someone pays for house stuff for the rest of Aunt's life and she maintains her right to return home. And then deal with MERP after their death. For most families this isn't realistic.

This is for a property that qualifies as exempt. I think you all are going to have an BIG issue in meeting the qualification for exemption if the house & land were a gift to her and never was her homestead. Then the value of the house & land are assets over 2k and will keep her from qualifying for Medicaid. THey will have to be sold with the $ from the sale used for her care or her needs. The local tax assessor info on the property is in the state's system so your aunts name is in the overall state's database as owner. Medicaid will know this eventually.

Find the latest tax assessor statement, that will give you a benchmark at just how much money you will need to try to sell it for. You may also be able to go on-line to the county website to get this info too.

At this point, you probably don't have the full 5 years to gift the property to the sister in law. If you do this now, Aunt will face a transfer penalty from Medicaid
and Medicaid won't pay a dime for her NH till the penalty is paid. Your situation show why long term planning for Medicaid is just so important.

Really I'd see an elder law attorney to see how to best structure putting up the house & land for sale and using the money to get things for auntie that are OK. Like a prepaid funeral & burial, dental work, new hearing aids, etc. Good luck.

I have power attorey of my aunt.She have dementia. My uncle left her a house and land. I am going to get medicaid for her. Will medicaid take her house and land. There is no one living in it. She have will that house and land to her sisiter in law. What can I do.

I have power attorey of my aunt.She have dementia. My uncle left her a house and land. I am going to get medicaid for her. Will medicaid take her house and land. There is no one living in it. She have will that house and land to her sisiter in law. What can I do.

There are different rules in every state, but basically Medicaid will allow you to stay in the home indefinitely, since you are the wife. Should you decide to sell the home, Medicaid wants to be paid back, because half that house is HIS estate. Typically, if you sell, they take his half to pay for his bills on a jointly owned house. The program that does this is called MERP (Medicaid Estate Recovery Program). So you can stay there forever and they will not bother you, they will wait for YOU to die and then go after the house. I know this is hard to accept, but you can go to an attorney for $375 per hour and get the same answer. Your call.