May 28, 2008
Previously I wrote about the exemptions for cars and homeplaces for
purposes of the Medicaid resource test. Several of you responded
confused about the difference between eligibility and Estate Recovery.
In order to qualify for Medicaid, the applicant/recipient ("A/R") must
meet the basic eligibility criteria e.g. age, citizenship, residency,
length of stay and level of care. A/R also must pass the resource
test, the income test and the transfer test. For purposes of the
resource test, A/R can own a home worth up to $500,000 or more if
certain qualifying people are residing in the home.
When the A/R dies, Estate Recovery becomes effective. Estate
Recovery is the process of paying the state and federal governments
back for the assistance provided. In Georgia, Estate Recovery
reaches back to May 3, 2006. That means that reimbursement is
expected for all Medicaid funds expended from that date forward.
The exceptions to Estate Recovery are not the same as used for the
resource test. For Estate Recovery purposes, exemptions are
provided if the total estate is worth less than $25,000 or if recovery
would cause undue hardship. Undue hardship is established
if the asset to be recovered is an income producing farm of one or more
of A/R's heirs and the annual gross income is $25,000 or less, or if
the recovery of assets would result in the heir becoming eligible for
public assistance himself.
Estate recovery is deferred if A/R is survived by a spouse, child under
21, or a blind or disabled child. So, as you can see, you can own
a home and qualify for Medicaid, but that does not mean that your home
is exempt for Estate Recovery purposes.
What do you do if you are a single homeowner on Medicaid and you want
to avoid Estate Recovery? If you have any suggestions, please let
me know. Next week I will offer mine plus any others that I
receive.
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