Can Medicaid recover funds from a lawsuit settlement?


Q. I am suing my nephew’s nursing home for serious medical neglect after he died. I raised my nephew and my name is on the estate paperwork after probate. An attorney said Medicaid can recover all the money they spent for his care. I’ve seen this for people 55 years and older, but if he was 29 in a nursing home, can Medicaid take back all their money if we receive a settlement?
— Auntie

A. We’re sorry to hear about your nephew.

Medicaid recovery rules can be confusing.

Medicaid has a right to recover funds from the estates of Medicaid recipients who were 55 or older at the time of their deaths, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

However, Medicaid is required to recover funds from the estates of Medicaid recipients who are younger than 55 when the funds are being paid from an award or a settlement by a third party, subject to a pro rata deduction for attorneys fees and expenses, she said.

“This includes payments made by insurance carriers or defendants in negligence and medical malpractice claims,” Whitenack said.

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This story was originally published on May 31, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.