Medicaid Estate Recovery

Estate Planning and Probate
Jason Neufeld
May 17, 2020

What is Medicaid Estate Recovery?


Florida Statutes 409.9101 is known as the “Medicaid Estate Recovery Act.” It derives its authority from the Omnibus Budget Reconciliation Act of 1993 (known as OBRA-93) which mandated that states, including Florida, seek recovery from the estate of a Medicaid recipient. In other words, Medicaid recovery allows the medicaid agency to file a claim against the estate of a Medicaid recipient. Essentially it creates a debt that only has to be paid upon the death of the medicaid recipient, from their probatable assets.

Some things to know:

When an estate is probated, Medicaid is treated like any other general creditor (similar to how Visa or FPL are treated if those bills are unpaid upon the death of the account holder).

If there are no cash assets available to satisfy the Medicaid estate-recovery claim, Medicaid may
force the sale of non-exempt personal property or real property (not homestead) if the costs of sale do not exceed expected proceeds.

Medicaid’s right to estate recovery is limited to the value of medical services provided to the
medicaid recipient.

Exceptions and Limitations to Medicaid Estate Recovery

Medicaid does not engage in its recovery effort until the Medicaid recipient passes away.

If Medicaid pays benefits to someone who is under age 55, no debt is created.

Medicaid will not enforce its debt in probate if, when the Medicaid recipient dies, he/she is survived by a spouse, child under the age of 21, or a child who is deemed permanently disabled by social-security standards, or a child who is blind.

Medicaid cannot recover from property that is exempt from creditors (e.g. homestead property).

Medicaid cannot recover from an estate under probate if the Medicaid estate recovery would result in an undue hardship for qualified heirs.

In Florida, Medicaid can only recover from the probate estate. The significance of this is huge. This is why it is incredibly important to engage in proper estate planning and proper medicaid planning. Assets in a revocable living trust can be accessed by creditors if there are insufficient assets to cover debts in the deceased's estate. However, with proper medicaid planning, the bulk of the medicaid recipient's assets will be sheltered and pass outside of probate. Note: just because assets are in a revocable trust, does not mean that probate is avoided. Creditors must still be paid from assets in a revocable trust. Again, this is another reason why meeting with an elder care lawyer who specializes in Medicaid planning is essential.

Medicaid Estate Recovery: Undue Hardship Factors

An undue hardship concession is difficult to obtain from the Medicaid agency. Medicaid will consider the following factors: (i) does the heir reside at the home of the decedent, have they lived there for a year prior to the Medicaid-recipient’s death?, and does the heir own no other residence; (ii) would the heir be deprived of shelter, clothing, food or medical care if Medicaid were to pursue its right to estate recovery?; (iii) can the heir document that they provided full-time care to the medicaid-recipient which delayed their entry into a nursing home (for at least a year prior to the medicaid-recipient’s death?

Is my house at risk?

It could be. But as described above, Medicaid will not assert its recovery against a homestead if the probate judge declares the  by creditors. Also the house is protected if medicaid recipient is survived by a spouse or young child or disabled child that reside in the house. But what if the health spouse (also referred to as “community spouse”) dies first? This is one of many reasons why engaging an elder law attorney is highly recommended. An elder law attorney can walk you through the proper steps on how to protect the home (and rental properties if applicable).

How To Determine How Much Is Owed to Medicaid?

In Florida, Medicaid contracts out its medicaid-estate recovery efforts to a 3rd party vendor called Conduent. Florida law requires a copy of the medicaid-recipient's death certificate be sent to:

Florida Medicaid TPL Recovery Program | P.O. Box 12188, Tallahassee, FL 32317-2188 | Email: | Fax: 844-845-8352

Medicaid will then file its claim with the applicable probate court. The clerk of courts will forward a copy of Medicaid's claim to the personal representative. Medicaid estate recovery contact information at the link.

Once Medicaid has been notified, they will send a letter substantially similar to the below letter, which was sent after the beneficiary of a pooled special needs trust in Florida passed away (portions of the letter have been redacted).

Related Medicaid Lawyer Resources

Will I Need to Sell My House to Qualify for Medicaid?

What is Medicaid Estate Recovery?

Jason Neufeld
Jason is committed to assisting and protecting the most vulnerable members of society, through his substantial legal work with the elderly.