Medicaid and Estate Recovery
Medicaid is a state-run program funded with both Federal and State funds to provide health care benefits to those who meet the need-based eligibility requirements. For senior citizens, Colorado Medicaid benefits are normally used within the state’s Long Term Care Medicaid Program, which includes monthly benefits not only to help pay for nursing homes, but home and community-based services so medical providers can come to a patient’s home and assist them. This helps keep a disabled person in their residence longer rather than putting them immediately into a nursing home or hospital.
In 1992, Colorado established an Estate Recovery Program mandated by Federal Law that requires states to recover some of the costs of the benefits paid to Medicaid recipients. After the death of individual who has received Medicaid benefits, the law requires that their assets be used to repay the Colorado Department of Health Care Policy and Financing to offset the cost of the benefits used.
To recover the costs of benefits from an estate, Colorado uses a third party contractor. The contractor will either place a lien on the deceased’s property or file a claim against the Estate of the deceased. There are several instances in which the State of Colorado will NOT pursue a claim against an estate, for example:
- If there is a surviving spouse;
- If there is a blind or disabled dependent of the deceased; or
- If there is a child under the age of 21.
In addition, the Estate Recovery Program allows exceptions when a person moved to the deceased’s residence prior to their admittance to a nursing home to help care for the individual. This exception covers siblings and children who have continuously lived in the home for at least two years, and in the case of children, helped provide care that allowed the individual to live in the home longer rather than enter a nursing facility. In these cases, the state may seek recovery from assets from the estate, but the home itself will not be subject to the recovery program.
As you can see, Medicaid law can be complex and confusing. For assistance, it’s best to work with a Colorado Medicaid attorney who has experience and expertise in this complex area of law.