I initially discussed this topic in my first Florida Medicaid estate recovery article. OBRA ’93 mandates that the state must seek recovery from a Medicaid recipient’s estate or upon the sale of property subject to a lien imposed on account of Medicaid expenses paid on behalf of the Medicaid recipient. 

General Rule: No recovery during life of Medicaid recipient

No lien is created against property of Medicaid recipient until that person passes away. Except:

·         If Medicaid incorrectly paid (i.e. person not entitled to those benefits) and receives a judgment by a court;

·         If Medicaid recipient owns real property without “intent to return home.”

     o   Unless Medicaid recipient’s spouse (community spouse) resides at home

     o   Unless child who is under 21, or blind or disabled resides in the home

     o   Unless the Medicaid applicant has a sibling that has lived in home for one year and has an equity interest in the home.

Medicaid Recovery in Personal Injury Cases

In Florida personal injury cases, if Medicaid paid medical expenses related to the personal injury case, Medicaid can recover such amounts upon personal injury settlement or verdict from the medical recovery portion of the personal injury case (i.e. not from lost wages or pain and suffering portion of personal injury recovery). Medicaid need not wait for the Medicaid recipient to pass away to recover from the personal injury settlement or verdict proceeds.

What Assets / Property Can Medicaid Recover From After Medicaid Recipient Dies?

42 USC 1396p (b)(4): Medicaid can recovery from the “estate” of the Medicaid recipient, however the term “estate” is defined in the state’s probate laws. Estate is either defined as those assets/property that pass though probate or some expanded estate recovery definition. Luckily, in Florida, Medicaid is limited to recovering from probatable assets only.

In Florida, proper planning by a Medicaid attorney can significantly reduce the assets Medicaid will be able to recovery from. In fact, in pre-planning cases, Medicaid estate recovery can legally and ethically be completely avoided altogether! If there is no probatable estate, there is no Medicaid estate recovery.

What happens if the community spouse dies first?

But even if the community spouse refuses to support the Medicaid-recipient (see spousal refusal), what happens if the community spouse dies first? State law will not allow the community spouse to completely disinherit the sick spouse through the spouse’s right to an elective share of the deceased’s estate. Medicaid can assume the right the institutionalized spouse had to that elective share.

Medicaid Lawyer Resources