Nursing Home Update Part 1 - State Implements “Estate Recovery Program

Tuesday, November 22, 2011

On July 1, 2011, Michigan began its long anticipated “Estate Recovery” program.

Estate Recovery is the concept that people over the age of 55 who receive Medicaid assistance with long term care expenses face the possibility that when they die the state can seek recovery of the expenses paid for their medical care from assets they own at their death.

Estate Recovery was first mandated by the federal government in 1993. Michigan became the last state of the union to adopt an estate recovery law, which occurred with the passage of MCL 400.11g - 400.112(j) in 2007 along with the modification of MCL 700.3805. Despite the passage of the 2007 law, implementation of an estate recovery program was delayed until July 1, 2011.

In late July, early August, clients who had family members who received Medicaid benefits and have since died, began receiving notices that estate recovery claims would be made against the estates of these deceased family members. It is important to understand that the existence of an estate recovery program does not alter the fact that for eligibility purposes a homestead remains an exempt asset. In fact estate recovery has nothing to do with eligibility. Estate recovery only comes into play when a person who was eligible for Medicaid assistance and who received long term care Medicaid benefits, dies.

Michigan’s estate recovery law is new, unclear in several respects, and may change. With that in mind, here is what is known about Michigan’s program:

1. Michigan’s estate recovery law began operating July 1, 2011
2. It will seek recovery for care costs for allowable Medicaid expenses going back to July 1, 2010.
3. Estate recovery claims will be asserted for all expenses paid to a Medicaid beneficiary receiving assistance for nursing home expenses, or benefits provided though the Michigan Choice Waiver Program, the Home Help program, Medicaid covered hospital expenses, Medicaid covered prescription drugs and/or PACE programs.

Up next time... We explore HMS Estate Recovery Documents Generated at Death. In the meantime if you have questions about elder law in Michigan, be sure to contact us. We'll be happy to help!