Personal tools

State Pursues Efforts to Implement Estate Recovery

Document Actions

Issue 27, Spring 2005

State Pursues Efforts to Implement Estate Recovery
by Alison Hirschel, MPLP Elder Law Attorney

State Medicaid Director Paul Reinhart recently announced that a bill to enact an estate recovery program will be introduced in the legislature shortly. Michigan is the only state that has not yet implemented an estate recovery program as mandated in federal law and the state is eager to pursue it now because of the significant shortfall in the Medicaid budget. Although legislators have for a long time been unwilling to introduce such a recommendation, DCH staff have said a sponsor has now been identified.

According to Reinhart, the proposed new law, which would permit the state to recover the costs of providing Medicaid long term care services from the estates of Medicaid recipients, would generate approximately $10 million in FY 2006. Reinhart alleged that when fully implemented, estate recovery could bring in $40 million annually. The proposed legislation is expected to provide protection for estates under $50,000, as well as farms, small businesses and surviving spouses and would not apply to individuals already in nursing homes at the time of passage.

The Governor's Medicaid Long Term Care Task force is expected to recommend an alternative plan, called "estate preservation." Under this proposal, which is endorsed by the State Bar Elder Law and Advocacy Section and was initially conceived by some DCH staff, all mortgage holders would be required to pay a small additional monthly payment which would exempt them from estate recovery if they ever receive Medicaid funded long term care in the future. Provisions would be made to permit individuals who are not paying mortgages to obtain similar protection. Some advocates suggest estate preservation could generate as much or more income for the state as estate recovery but it is not known whether the Centers for Medicare and Medicaid Advocacy would approve the creative program as an alternative to federally mandated estate recovery.