How Long Does Medicaid Have to Recoup Benefits from an Estate?
If you are over the age of 55 and have been receiving long-term care benefits from Medicaid, then the chances are very good that Medicaid will try to recoup the money it has spent when you pass away. The Medicaid Estate Recovery Program (MERP) exists in most states and has come about to help keep down the costs of Medicaid to the taxpayers. Without the MERP program, Medicaid would be giving out money and never taking anything in. Over time, this sort of financial model is bound to collapse.
How Does Medicaid Work?
Medicaid is set up to help low-income families to get the kind of medical care they need but cannot afford. The two most common uses of Medicaid are as primary health insurance for low-income families, and as the entity that pays the difference between what a person can afford for long-term care and the actual cost of the care.
Medicaid is funded primarily by federal dollars, but each state has also designated how much it wants to contribute to its funds pool. The states set the qualification limits for Medicaid, but they generally follow federal guidelines that have been put in place. It is the state that takes in Medicaid applications and processes Medicaid claims.
What Happens When I Need Long-Term Care?
When you find yourself in need of assisted living services either due to a crippling disease or injury, or because of your inability to care for yourself any longer, then your Medicaid application process begins. Medicaid will help pay for the portion of your long-term care that your assets cannot cover, provided you choose to live in a Medicaid-approved facility. All of your assets from your income to your home are taken into account, and then Medicaid comes up with an amount that they will pay.
The Medicaid application process is extremely complex. It is something that you should start preparing for as soon as you can, and something you should be doing with the guidance of an experienced elder law attorney. The sooner you start planning for your long-term care needs, the easier it is to protect certain assets from Medicaid once the MERP process begins.
Why Does Medicaid Take My Assets?
If you and your family were forced to pay for your long-term care on your own, there is a very good chance that all of your assets would have to be sold anyways. Thanks to Medicaid, you have a chance at not only getting the quality long-term care you need, but also of your family keeping some of your assets after you have passed away. While it is not an ideal asset preservation system, Medicaid does offer enough options where your hopes for helping your heirs after you pass away can remain intact.
When Does The MERP Process Start?
In many situations, only one spouse winds up having to go into long-term care that is paid for by Medicaid. The common misconception is that Medicaid starts liquidating assets the moment that spouse passes away. The truth is that as long as the surviving spouse is living in the family home, Medicaid cannot liquidate the home.
Medicaid is also not allowed to liquidate the home after the recipient’s death if there is a dependent child under the age of 21 living in the home. As long as these one or both of these two qualifying family members are living in the family home, Medicaid will suspend the MERP process until the home is empty.
Is There A Time Limit For The MERP Process To Start?
Since no one can predict when a surviving spouse or special needs child is going to pass away, there is no real time limit for the Medicaid MERP process. Prior to liquidating the family home, Medicaid may go after outside asset sources that the deceased recipient was part or sole owner. The list of exempt and available assets for the MERP process varies by state. The family should consult an attorney if it is concerned with the status of their loved one’s assets.
How Long Can The MERP Process Last?
The MERP process will last as long as it takes for Medicaid to access assets where it has permission to liquidate those assets and use that funding to pay back the amount of money used for long-term care. The process stops when Medicaid has recovered all of the money it spent on the deceased recipient, and no more. No state Medicaid system is allowed to collect more money than it spent on a person’s care.
Dealing with Medicaid can be extremely frustrating and confusing. Our firm’s elder law services include crisis and non-crisis Medicaid planning that can protect some of your biggest assets from the MERP process. The sooner you come to us to get started, the more we can do to protect your assets. We recommend that you contact one of our elder law lawyers today and find out how you can protect your family’s future from your pending long-term care needs.