When a person who received Medicaid benefits passes away, the state of Kentucky has the power to collect the cost of those benefits from the deceased’s estate. If you recently lost a loved one who was on Medicaid, the last thing you want to worry about is losing the family home and other treasured assets to the state. Full knowledge of your rights and those of the state can help you know what to expect and, if your loved one’s situation meets an exemption, grant you peace of mind.
Per 907 Ky. Admin. Regs. 1:585, The Cabinet for Health and Family Services, Department for Medicaid Services, may seek reimbursement through the deceased’s estate if the deceased required institutionalization before passing away. The amount the department may recover may not exceed the amount it paid out in benefits for services related to the institutionalization. Eligible services for recovery are as follows:
- Nursing facility services
- Home and community-based services
- Acquired brain injury
- Intermediate care for intellectual disabilities
- Medicare cost-sharing or Medicare premiums
- Costs associated with hospital services, prescription drugs and physician services
The legislature does list several exemptions. The state may not recover from your loved one’s estate if the representative can verify that the deceased has a surviving spouse or surviving child. If recovery would create undue hardship on the estate or your family, the department may waive recovery. It may also waive recovery if it determines that collections actions would yield little to no profit. If the total value of the estate at the time of death is $10,000 or less, the department may decide that recovery would not be cost-effective.