The Texas Medicaid program pays almost half the cost of all nursing home and other long term care expenses. So in March of 2005, Texas implemented the Medicaid Estate Recovery Program (MERP) to comply with federal laws. This program allows the state to file a claim against the estate of a deceased Medicaid recipient, age 55 or older, who received payments for certain long-term care services. Claims can include the cost of services, hospital care and prescription drugs paid for by Medicaid. However, the state will not file claims in the following situations:
a) where there are estates valued less than $10,000,
b) where the costs were less than $3,000,
c) where the cost of selling the property would be result in no value.
The state will not file a claim when there is a surviving spouse, there is a surviving child under 21 years of age, there is a child who is blind or totally disabled, or where there is a an unmarried child living in the Medicaid recipient’s homestead for at least one year prior to the death. The state also allows a hardship waiver to be filed in certain situations.
The State will not collect certain types of assets that fall outside a person’s estate. Therefore it may be necessary to do your estate planning with consideration given to Medicaid rules.
The personal representative of an estate (executor or administrator) is required by law to give the State of Texas notice of Medicaid recipient’s death thereby allowing the state to file a claim. Such a claim by the State of Texas is a Class 7 claim which is paid after funeral bills, administration expenses, secured claims, child support, taxes, and it is paid before all other creditors and before the beneficiaries are compensated.
The Department of Aging and Disability Services administers the MERP and they provide a wonderful guide for those with additional questions.