21 Jun Is a personal needs account balance exempt from Medicaid recovery?

Q. My father, a former nursing home resident, on Dec. 17, 2022. His personal needs account (PNA) had $50.06 balance in it at the time of death. He was on Medicaid and Medicaid paid in full for his cremation. The nursing home says the $50.06 balance was given to Medicaid to help pay for the funeral, despite my repeated requests to transfer to Mom’s PNA. She is also a resident of the nursing home. The $50.06 was originally transferred from my mother’s account. I believed that PNAs are exempt from Medicaid recovery and also because Mom is Dad’s survivor/beneficiary and also on Medicaid, the money can be transferred back to Mom’s PNA. Is that correct.
— Daughter

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

And we’re also glad you’re looking out for your mom.

N.J. Admin. Code § 8:85-1.16(f)(14)(i) makes it clear that PNA funds are subject to estate recovery, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newton.

Only when no Medicaid claim exists can the executor or administrator be issued a check made payable to the estate of the deceased Medicaid beneficiary for the PNA funds, she said.

But as far as transferring the funds to Mom, the Division of Medical and Health Services website offers “The New Jersey Medicaid Program and Estate Recovery: What You Should Know,” which indicates the Medicaid only recovers where there is no surviving spouse, Reading said.:
It says:

“When will DMAHS not seek recovery immediately upon death?
DMAHS will not seek recovery if there is a surviving spouse or a surviving child who is under the age of 21, or is blind or permanently and totally disabled according to Social Security standards at 42 USC 1382c. In that case, repayment would be postponed until:
1. The child reached the age of 21, or,
2. The time of the spouse or child’s death.
When any of these exceptions to DMAHS’ right to recover from an estate no longer apply (i.e., as a result of the death of a surviving spouse, attainment of age 21 by a surviving child, and/or recovery from disability or death of a blind or permanently and totally disabled child), DMAHS has a right to recover from any remaining estate assets at that time.”

“So it would appear that the nursing home was wrong to send the money to Medicaid,” Reading said, and she recommends you use the language above to ask the nursing home to correct the error.

Email your questions to .

This story was originally published on June 21, 2023.

NJMoneyHelp.com 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.