The longer you live, the more likely it becomes that you, or your spouse, will need long-term care (LTC). If either of you does end up in LTC, you may end up relying on Medicaid to help cover the high cost of that care. Qualifying for Medicaid can be tricky because of the income and asset limits the program uses when determining eligibility. Moreover, your assets could still be at risk after you are gone. The Owings Mills Medicaid planning attorneys at Gershberg & Associates, LLC explain what you need to know about the Maryland Medicaid Estate Recovery Program:
Medicaid Eligibility and Your Need to Qualify
Medicaid is a federally funded (with state supplemental funding optional) healthcare program intended to help low-income individuals and families. Although primarily funded by the federal government, Medicaid is administered by the individual states. Eligibility for Medicaid depends, among other things, on an applicant’s income and “countable resources.” Because Medicaid is a “needs-based” program, an applicant’s income and assets cannot exceed the program limits. The average cost of LTC in 2021 was over $100,000 a year nationwide and over $125,000 for Maryland residents, and the cost for a memory care unit was even higher. It is no surprise that about half of all seniors in LTC facilities depend on Medicaid to help cover their expenses. Those same seniors often believe that once they make it through the Medicaid approval process, their assets are safe. Unfortunately, that is not always the case. The Medicaid Estate Recovery Program (MERP) could still pose a threat to the assets left behind by a Medicaid recipient.
What Is the Medicaid Estate Recovery Program (MERP)?
The MERP program is a federal-state program designed to recover some or all Medicaid-funded medical costs from the estates of certain Medicaid beneficiaries, including nursing home residents whose costs of care were covered by Medicaid. In short, if Medicaid pays any of your LTC costs while you are alive, the State of Maryland can try and get some of that money back from your estate when you die. The Maryland MERP rules allow the state to put a lien on your home, regardless of your age at the time, if you are:
- Admitted to a nursing home, and
- Granted eligibility for Medicaid, and
- Determined by medical review as “not able to resume living in the home property.”
MERP cannot put a lien on your home if any of the following people are living in the home:
- There is a spouse who is still alive.
- There is a child under 21 years of age.
- There is a child of any age who is blind or disabled
MERP can also file a claim against your general estate assets after your death if you were at least 55 years old when receiving Medicaid benefits. Only money that was paid by Medicaid for medical services rendered to the recipient on or after your 55th birthday can be recovered when a claim is filed against your estate.
Maryland Medicaid Estate Recovery Program Hardship Exception
Like most states, Maryland has a “hardship” exception to the MERP rules. This allows MERP to waive recovery from the estate if pursuing recovery would result in an “undue hardship.” Maryland defines a hardship as a situation where a MERP claim will result in the removal of a dependent who:
- Lived in the property at the time of the Medicaid recipient’s death.
- Lived there continuously for a period of two years before the Medicaid recipient’s death, and
- Cannot find another place to live.
Medicaid Planning
The Medicaid eligibility rules, as well as the Medicaid Estate Recovery Program rules, are complex and ever-changing. The best way to ensure that your assets are protected should you need to rely on Medicaid in the future is to include Medicaid planning in your estate plan now.
Contact My Estate Planning Office Today For Help
For more information, or if you have additional questions or concerns about the Maryland MERP program, or about including Medicaid planning in your estate plan, contact my estate planning office in Owings Mills, Maryland by calling 410-654-3850 to schedule an appointment.
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