16 Apr Will Medicaid go after a $16K estate?

Q. I was 57 when I went on Medicaid. I was hesitant to sign the estate recovery forms but was told repeatedly by their agents that they would not come after my assets for a small amount of money but rather only for long-term care expenses due to the huge amount of money spent on this care. I signed the forms but after a couple years I became concerned because in truth I don’t trust government. Do you think the state will go after $16,000 via a lien?
— Concerned

A. We’re glad you’re aware of estate recovery.

Let’s explain how it works.

Medicaid’s estate recovery policy provides the state an option to seek reimbursement from the estates of deceased (former) Medicaid recipients, said Donald A. Dennison, an attorney in the Elder Law department at Mandelbaum Barrett PC in Roseland.

Medicaid’s Estate Recovery Unit can only seek reimbursement from the estates of former Medicaid recipients aged 55 years and older, and only up to the amount of benefits paid on behalf of the Medicaid recipient during their lifetime, Dennison said.

In New Jersey, estate recovery against a married couple, where only one spouse receives Medicaid benefits, can only be pursued after the death of the second spouse, he said.

“Estate recovery is an option, meaning, the state has total discretion to pursue — or not — recovery against any given estate subject to its policy,” he said. “Given the nature of Medicaid benefits — a means-tested, impoverishment program — most deceased Medicaid recipients leave behind no or very minimal assets, therefore, the state is often left `holding the bag.’”

In those cases, the state is unlikely to pursue estate recovery as it would be a potentially high cost and little or no benefit endeavor, Dennison said.

On the other hand, he said, situations may and do arise in which the estate of a deceased Medicaid recipient contains assets reachable by the Estate Recovery Unit.

Under those circumstances, the state would likely pursue recovery if the cost of doing so is less than what the state seeks to recover, he said. Basically, think cost-benefit analysis.

That being said, Dennison said he cannot predict whether the state will pursue recovery against a $16,000 estate.

“Again, the ultimate determination will be based on the cost-benefit analysis, coupled with various other factors such as the state of the economy and the politicians we elect to represent us,” he said.

Email your questions to .

This story was originally published in April 2024.

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.