No, hospice does not do estate recovery. The hospice provider — whether it is a hospital-based program, a standalone agency, or a home-based team — has no legal authority to come after a patient’s estate. Medicaid is the entity that pursues estate recovery. If a person received hospice care paid for by Medicaid’s Estate Recovery Program (MERP), the state can seek reimbursement from that person’s estate after death.
Medicare, which covers the vast majority of hospice care in the United States, does not have an estate recovery program. This is a critical distinction. A person who receives hospice under Medicare alone will never face estate recovery for those services.
The confusion happens because families often do not learn about MERP until a loved one passes away and a letter arrives demanding repayment. Under 42 U.S. Code § 1396p(b), the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) requires every state to recover Medicaid long-term care costs from the estates of deceased beneficiaries age 55 and older. According to KFF’s 2024 analysis, estate recovery raised only $733 million in 2019 — offsetting just 0.1% of total Medicaid spending — yet the financial and emotional toll on individual families can be devastating.
Here is what you will learn in this article:
- 🏥 Why hospice care itself does not trigger estate recovery — but Medicaid-funded hospice benefits can
- 🏠 How MERP can claim your family home, savings, and other assets after death
- 🛡️ Proven strategies to protect assets from Medicaid estate recovery before it is too late
- ⚖️ Key exemptions and hardship waivers that can stop MERP completely
- ❌ Common mistakes families make that put their loved one’s inheritance at risk
Medicare Hospice and Medicaid Hospice Are Not the Same Thing
Medicare hospice is an insurance benefit that working Americans pay into through payroll taxes throughout their careers. When a person elects Medicare hospice, they receive comfort-focused care for a terminal illness with a life expectancy of six months or less. Medicare covers the full cost of hospice services, including nursing visits, medication for symptom management, medical equipment, and bereavement counseling for the family. No estate recovery exists under Medicare because beneficiaries already paid for this coverage during their working years.
Medicaid hospice works differently. Medicaid is a needs-based program for people with limited income and resources. When Medicaid pays for hospice — or any long-term care service — OBRA ’93 gives the state the right to seek reimbursement after the beneficiary dies. The state files a claim against the deceased person’s estate to recoup what Medicaid spent.
Many people are dual-eligible, meaning they qualify for both Medicare and Medicaid at the same time. For these individuals, Medicare is the primary payer for hospice. Medicaid may cover certain additional costs that Medicare does not, such as room and board in a nursing facility. If Medicaid paid for any portion of a dual-eligible person’s care, the state can attempt estate recovery for the Medicaid-funded portion.
| Hospice Payer | Estate Recovery Risk |
|---|---|
| Medicare only | No estate recovery. Medicare has no recovery program. |
| Medicaid only | Yes. The state’s MERP can seek full reimbursement from the estate. |
| Dual-eligible (Medicare + Medicaid) | Partial. The state can only recover the Medicaid-funded portion. |
| Private insurance or out-of-pocket | No estate recovery. Private payers do not have recovery authority. |
What Is the Medicaid Estate Recovery Program?
MERP is a federally mandated program that requires every state to seek reimbursement for long-term care costs paid by Medicaid on behalf of a deceased beneficiary. OBRA ’93 established this requirement. Before 1993, estate recovery was optional, and most states did not bother with it.
Under federal law, states must recover costs for the following services provided to Medicaid recipients age 55 and older:
- Nursing home care
- Home and community-based services (HCBS)
- Hospital and prescription drug costs related to long-term care
States also may choose to recover costs for all other Medicaid-covered services, not just long-term care. According to KFF’s survey of states, 32 states have expanded their recovery programs to cover all Medicaid benefits for individuals age 55 and older. An additional 28 states pursue estate recovery for certain individuals under age 55 who were permanently institutionalized.
All money collected through MERP goes back into the state’s Medicaid program. The state cannot collect more from an estate than what Medicaid actually paid for the deceased person’s care.
How MERP Works After a Loved One Dies
The process begins shortly after a Medicaid recipient passes away. The state’s Medicaid agency sends a letter — typically to the executor of the estate or a close family member — informing them of Medicaid’s intent to file a claim for repayment. This letter details how much Medicaid spent on the deceased person’s care.
The family or estate executor then has a limited window to respond. They can pay the claim, negotiate a reduced amount, apply for an undue hardship waiver, or contest the claim if they believe it is incorrect. The specific timeline depends on the state. For example, New York and Minnesota require hardship applications within 30 days, while Texas allows 60 days.
If the estate cannot pay the full amount, Medicaid can force the sale of assets — including the family home — to satisfy the debt. The state’s claim is treated like any other creditor claim during probate. Medicaid’s priority level among creditors varies by state, but it often takes precedence over distributions to heirs.
One important rule protects families: if there is nothing left in the estate after paying higher-priority debts like a mortgage, the state cannot recover anything. Heirs are never personally responsible for repaying Medicaid with their own money.
What Hospice Services Can Trigger MERP?
Not all hospice services carry the same estate recovery risk. The type of service — and who pays for it — determines whether MERP applies.
Hospice in a nursing facility is the most common trigger. When a Medicaid recipient lives in a nursing home and receives hospice care there, Medicaid often covers room and board while Medicare covers the hospice-specific services. The room and board payments made by Medicaid are recoverable through MERP.
Home and community-based hospice funded by Medicaid also triggers MERP. If a person receives Medicaid-funded personal care aides, respite care, or medical supplies at home as part of a hospice or palliative care plan, those costs are recoverable under OBRA ’93.
Prescription drugs related to long-term care that Medicaid covers during a hospice stay are also subject to recovery. This includes medications for conditions unrelated to the terminal diagnosis if Medicaid — not Medicare — is the payer.
| Service Type | MERP Risk |
|---|---|
| Hospice nursing visits (Medicare-covered) | Not recoverable through MERP |
| Nursing facility room and board (Medicaid-covered) | Recoverable through MERP |
| Home-based hospice aide (Medicaid-covered) | Recoverable through MERP |
| Prescription drugs for terminal illness (Medicare hospice) | Not recoverable through MERP |
| Prescription drugs for other conditions (Medicaid-covered) | Recoverable through MERP |
Probate-Only States vs. Expanded Recovery States
The scope of what Medicaid can recover depends heavily on whether a state uses a probate-only or expanded definition of estate. This distinction can mean the difference between losing a home and keeping it.
Probate-only states limit MERP to assets that pass through the probate court process. Probate assets are those held solely in the deceased person’s name, or jointly owned as “tenants in common.” In these states, assets held in a living trust, joint tenancy with right of survivorship, or with a named beneficiary avoid estate recovery because they do not go through probate.
Expanded recovery states go further. These states define “estate” to include assets that bypass probate, such as property held in joint tenancy, life estates, living trusts, and other arrangements. In an expanded recovery state, simply keeping an asset out of probate does not protect it from MERP.
| Probate-Only States | Expanded Recovery States |
|---|---|
| Alaska, California, Colorado, Delaware, Florida | Alabama, Arizona, Arkansas, Connecticut, Georgia |
| Hawaii, Illinois, Louisiana, Maryland, Massachusetts | Idaho, Indiana, Iowa, Kansas, Kentucky |
| Michigan, Missouri, New Mexico, New York | Maine, Minnesota, Mississippi, Montana, Nebraska |
| North Carolina, Oklahoma, Pennsylvania | Nevada, New Hampshire, New Jersey, North Dakota |
| Rhode Island, South Carolina, Tennessee, Texas | Ohio, Oregon, South Dakota, Utah, Virginia |
| Vermont, Washington DC, West Virginia | Washington, Wisconsin, Wyoming |
Minnesota stands out as one of the most aggressive states. Minnesota’s recovery statute modifies probate law so that interests held as life tenants or joint tenants — which normally merge by their nature and avoid probate — are pulled back into probate and made available for recovery. Wyoming is also aggressive, allowing recovery even while a surviving spouse is still alive in some circumstances.
Three Real-World Scenarios: When MERP Hits After Hospice
Scenario 1: Maria’s Mother Received Medicaid Hospice in a Nursing Home
Maria’s mother, age 78, lived in a nursing home for three years before entering hospice care. Medicaid paid for her room and board during that time. Medicare covered the hospice-specific services. After her mother passed away, Maria received a MERP letter stating Medicaid had spent $187,000 on room and board and related costs. Maria’s mother’s only remaining asset was her home, valued at $210,000.
| What Happened | What It Meant for Maria |
|---|---|
| Mother entered nursing home on Medicaid | Medicaid paid room and board for 3 years |
| Mother transitioned to hospice in the facility | Medicare covered hospice; Medicaid still covered room and board |
| Mother passed away at age 78 | State sent MERP claim for $187,000 |
| Home was the only estate asset worth $210,000 | State filed claim in probate to recover $187,000 from home sale |
| Maria had not lived in the home for 2+ years | No caregiver child exemption available |
| Home was sold during probate | Maria inherited only $23,000 after MERP claim |
Maria could have protected the home if she had lived there and provided care for at least two years before her mother’s nursing home admission. This is known as the child caregiver exemption. Without it, the home was fully exposed to MERP.
Scenario 2: James’s Wife Received Medicaid Hospice at Home
James, age 72, cared for his wife at home while she received Medicaid-funded home and community-based services, including a hospice aide and personal care assistance. Medicaid spent $94,000 over two years. After his wife died, James worried he would lose their home.
| What Happened | What It Meant for James |
|---|---|
| Wife received Medicaid HCBS and hospice at home | Medicaid paid $94,000 for aide and care services |
| Wife passed away | State sent MERP notice to James |
| James is the surviving spouse | Federal law prohibits MERP while a surviving spouse is alive |
| James continues living in the home | No lien can be placed while James occupies the home |
| James later passes away | Some states will pursue MERP against James’s estate; others will not |
James was protected by the surviving spouse exemption under federal law. The state could not touch the home while James was alive. Whether the state pursues recovery after James’s death depends on the state. California and Texas, for example, prohibit recovery after the non-Medicaid spouse dies. Other states, like Ohio, will pursue recovery from the surviving spouse’s estate.
Scenario 3: David’s Father Had Medicaid Hospice and an Irrevocable Trust
David’s father, age 80, transferred his home into an irrevocable Medicaid asset protection trust seven years before applying for Medicaid. He then received Medicaid-funded hospice at home for nine months before passing away. Medicaid spent $38,000. The state sent a MERP letter.
| What Happened | What It Meant for David |
|---|---|
| Father created irrevocable trust 7 years before Medicaid | Home was removed from father’s estate; 5-year look-back cleared |
| Father received Medicaid hospice at home | Medicaid spent $38,000 on care |
| Father passed away | State sent MERP claim |
| Home was in irrevocable trust, not in father’s name | Home was not part of probate estate or recoverable estate |
| State could not recover from the trust | David inherited the home free and clear |
| Father’s remaining personal assets totaled $1,200 | State recovered $1,200 — the only assets in the estate |
David’s father planned ahead. By transferring the home into an irrevocable trust more than five years before applying for Medicaid, the home cleared the look-back period. The trust shielded the property from both Medicaid’s asset limit and MERP.
Federal Exemptions That Block Estate Recovery
Federal law creates several situations where a state cannot pursue MERP, regardless of which state the person lived in. These exemptions exist to prevent families from facing homelessness or extreme financial hardship.
Surviving spouse exemption. The state cannot recover from the estate while a surviving spouse is alive. This is the most powerful federal protection. It does not matter how much Medicaid spent.
Minor child exemption. The state cannot recover if the deceased has a surviving child under age 21. In some states, MERP can begin once the child turns 21, but statutes of limitation may prevent it.
Blind or disabled child exemption. If the deceased has a surviving child of any age who is blind or permanently disabled as defined by the Social Security Administration, MERP is blocked.
Sibling exemption. A sibling who has equity interest in the home and has lived there for at least one year before the Medicaid recipient entered a nursing home can receive the home free of MERP.
Child caregiver exemption. An adult child who lived in the parent’s home for at least two years before institutionalization — and provided care that delayed the need for nursing home admission — can receive the home without MERP.
The Undue Hardship Waiver: A Safety Net for Families
Every state must offer an undue hardship waiver that can reduce or eliminate estate recovery. The federal government requires this safety net but does not define exactly what “undue hardship” means. Each state sets its own rules.
Common grounds for an undue hardship waiver include:
- The estate is the survivor’s sole income-producing asset — such as a farm or small business. Thirty-five states accept this as grounds for a waiver according to KFF’s survey.
- The home is of modest value — generally defined as 50% or less of the average home price in the county. Only 15 states recognize this exemption.
- The survivor would need public assistance if recovery took place. States like Idaho, Ohio, and Wisconsin specifically waive MERP if it would push the survivor onto government aid.
- Other compelling circumstances exist that make recovery unjust.
The approval rate varies wildly. In Iowa, 95% of hardship applications were granted in 2019. In New York, only 29% were approved. Hiring an elder law attorney to prepare the application significantly improves the chances of approval in states with low grant rates.
How States Handle MERP Differently
MERP is not one-size-fits-all. State-level differences can mean tens of thousands of dollars saved or lost for a family.
Minimum estate thresholds. Some states will not pursue MERP if the estate is below a certain value. Pennsylvania does not pursue estates worth $2,400 or less (unless there is no heir). Kentucky and Texas set the threshold at $10,000. Illinois and Georgia set it at $25,000.
Recovery after the surviving spouse dies. While federal law prohibits MERP during the surviving spouse’s lifetime, what happens after the spouse dies is up to the state. California and Texas prohibit further recovery. Ohio, South Dakota, and Wyoming allow recovery from the surviving spouse’s estate.
Managed care premiums. Over half of states (30) use MERP to recoup premiums paid to managed care organizations on behalf of enrollees — even if the enrollee never used long-term care services. This means some families face estate recovery claims for premiums, not for actual care received.
Liens on property. Some states place a lien on the Medicaid recipient’s home while they are still alive and permanently institutionalized. This is called a TEFRA lien, named after the Tax Equity and Fiscal Responsibility Act of 1982. A lien prevents the home from being sold or transferred without first paying Medicaid. States like South Dakota automatically place one as soon as the person begins receiving Medicaid long-term care.
Five states dominate collections. Massachusetts, New York, Pennsylvania, Ohio, and Wisconsin accounted for nearly 40% of all MERP collections nationwide in fiscal year 2019. The average amount recovered per estate ranged from about $5,000 in Missouri and Wisconsin to over $30,000 in Alaska and Georgia.
Protecting Your Family Home and Assets from MERP
Planning ahead is the single most effective way to shield assets from Medicaid estate recovery. The best time to plan is well before long-term care is needed. Every strategy below involves trade-offs, and an elder law attorney should guide the process.
Irrevocable Medicaid Asset Protection Trust
An irrevocable trust removes assets from a person’s countable estate for both Medicaid eligibility and estate recovery purposes. Once assets are transferred into the trust, the person no longer owns them. Medicaid cannot place a lien on them or recover them through MERP.
The catch is the five-year look-back period. Medicaid reviews all asset transfers made within five years of a long-term care application. If the trust was created within that window, the transfer triggers a penalty period of Medicaid ineligibility. The family must pay for care out of pocket during the penalty. This makes timing critical — the trust must be created at least five years before Medicaid is needed.
The trust must be irrevocable, meaning the creator cannot cancel it, change its terms, or take assets back. A revocable trust does not work because Medicaid considers assets in a revocable trust to still belong to the person.
Lady Bird Deed (Enhanced Life Estate Deed)
A Lady Bird deed allows a homeowner to retain full control of their property during their lifetime — including the right to sell, mortgage, or live in it — while automatically transferring ownership to a named beneficiary upon death. The transfer bypasses probate entirely.
In probate-only states, a Lady Bird deed is one of the most effective MERP protections available. Because the home never enters probate, the state cannot recover against it. Lady Bird deeds are recognized in Florida, Michigan, Texas, Vermont, and West Virginia, among others.
Lady Bird deeds do not trigger the Medicaid look-back period because the homeowner retains control during their lifetime. This makes them a powerful last-minute planning tool compared to irrevocable trusts.
Traditional Life Estate Deed
A traditional life estate deed splits ownership into two parts: the life tenant (the original owner) keeps the right to live in the home, and the remainderman (usually an adult child) receives ownership after the life tenant dies. The home bypasses probate upon death.
In probate-only states, this protects the home from MERP. In expanded recovery states, the result is different. States like Minnesota specifically target life estate interests for recovery, pulling them back into the recoverable estate.
A traditional life estate deed does trigger the Medicaid look-back period because the homeowner gives up partial ownership at the time of the deed. The transfer must happen more than five years before a Medicaid application to avoid a penalty.
Keeping Assets Out of Probate in Probate-Only States
In the 25 states that use probate-only recovery, the simplest protection is to ensure assets do not pass through probate. Methods include:
- Naming beneficiaries on bank accounts, retirement accounts, and life insurance policies
- Holding property in joint tenancy with right of survivorship
- Using payable-on-death (POD) or transfer-on-death (TOD) designations
- Placing assets in a revocable living trust (in probate-only states, this removes assets from the probate estate)
These strategies are only effective in probate-only states. In expanded recovery states, these assets remain recoverable regardless of whether they go through probate.
Asset Protection Strategy Comparison
| Strategy | Key Consideration |
|---|---|
| Irrevocable trust | Strongest protection but requires 5-year advance planning and loss of control |
| Lady Bird deed | Retains full control; no look-back penalty; only works in certain states |
| Traditional life estate deed | Triggers look-back period; vulnerable in expanded recovery states |
| Joint tenancy with survivorship | Effective in probate-only states; exposed in expanded recovery states |
| TOD/POD designations | Simple and effective in probate-only states; no protection in expanded states |
| Child caregiver exemption | Protects the home but requires 2+ years of in-home caregiving before institutionalization |
Mistakes to Avoid When Dealing with MERP
Assuming Medicare hospice means no estate recovery. Many families believe that because their loved one was “on hospice,” no estate recovery can happen. If Medicaid also paid for any portion of care — including room and board in a nursing facility — MERP applies to the Medicaid portion. The result is an unexpected claim against the estate.
Selling the home while the Medicaid recipient is alive. Selling the home converts an exempt asset (the house) into a countable asset (cash). This can push the Medicaid recipient over the asset limit, causing immediate disqualification from Medicaid. The family must then pay for nursing home care out of pocket until the cash is spent down.
Transferring the home within the five-year look-back period. If a Medicaid applicant transferred their home to a family member within five years of applying for Medicaid, the transfer triggers a penalty period during which Medicaid will not pay for long-term care. The penalty length depends on the value of the transferred asset divided by the average monthly cost of nursing home care in the state.
Using a revocable trust and thinking it protects assets. A revocable trust does not protect assets from Medicaid’s asset limit or from MERP. Because the trust creator can change or cancel it at any time, Medicaid considers the assets to still belong to that person. This is one of the most common and expensive mistakes.
Ignoring the MERP notice letter. When a family receives a MERP notice and does nothing, the state proceeds with its claim. The family loses the opportunity to apply for an undue hardship waiver, negotiate the amount, or present exemptions. Every state has a deadline to respond, and missing it can eliminate options.
Not knowing whether the state is probate-only or expanded recovery. A strategy that works perfectly in a probate-only state — like placing assets in a living trust — may offer zero protection in an expanded recovery state. Families must understand their state’s specific rules before implementing any plan.
Failing to use the child caregiver or sibling exemption. These exemptions can prevent MERP entirely, but they have strict requirements. The adult child must have lived in the home for two years and provided care that delayed institutionalization. The sibling must have equity interest and lived there for at least one year. Families who do not document their caregiving or residency lose access to these protections.
Do’s and Don’ts for Families Facing MERP
Do’s:
- Do consult an elder law attorney before a loved one applies for Medicaid. Early planning opens up more asset protection options and avoids costly mistakes.
- Do check whether your state uses probate-only or expanded estate recovery. This single factor determines which planning strategies work and which do not.
- Do respond to every MERP notice letter within the state’s deadline. Ignoring it forfeits your right to apply for hardship waivers and exemptions.
- Do document caregiving if an adult child lives in the parent’s home. Keep records of medical appointments, care provided, and the timeline of residency to support the child caregiver exemption.
- Do name beneficiaries on every financial account, retirement plan, and life insurance policy. In probate-only states, this removes these assets from Medicaid’s reach.
Don’ts:
- Don’t assume hospice means estate recovery. Only Medicaid-funded services trigger MERP. Medicare hospice does not.
- Don’t transfer the home or large assets without understanding the five-year look-back rule. A poorly timed transfer can result in months of Medicaid ineligibility.
- Don’t rely on a revocable trust to protect assets from MERP. Medicaid treats revocable trust assets as belonging to the person.
- Don’t sell the home while a loved one is receiving Medicaid long-term care. This converts an exempt asset into countable cash and risks Medicaid disqualification.
- Don’t wait until after death to think about MERP. By then, planning options are gone. The only remaining option is the undue hardship waiver.
Pros and Cons of Medicaid Estate Recovery
| Pros of MERP | Cons of MERP |
|---|---|
| Returns money to the Medicaid program to fund care for other beneficiaries | Falls hardest on low-income families who had few assets to begin with |
| Encourages people with resources to contribute to their own long-term care costs | Raises relatively little revenue — just 0.1% of total Medicaid spending in 2019 |
| Prevents wealthy individuals from shielding assets to qualify for Medicaid while preserving large estates | Families with resources can hire attorneys to legally avoid MERP, creating an unequal system |
| Promotes fairness between those who pay for their own care and those who rely on Medicaid | Creates high administrative costs for states that can exceed the amount recovered from small estates |
| Exists under clear federal authority (OBRA ’93) with defined exemptions | May deter eligible people from applying for Medicaid out of fear of losing their home |
Key Entities and Their Roles in Estate Recovery
Centers for Medicare & Medicaid Services (CMS) is the federal agency that oversees both Medicare and Medicaid. CMS sets the minimum standards for MERP that all states must follow and provides guidance on hardship waivers.
State Medicaid agencies administer MERP at the state level. They send the MERP notice letters, file claims against estates, negotiate settlements, and process hardship waiver applications. Each state agency has its own procedures and timelines.
Probate courts handle the legal process of distributing a deceased person’s assets. MERP claims are filed during probate, and the court determines how to allocate the estate among creditors — including Medicaid — and heirs.
Elder law attorneys specialize in Medicaid planning, asset protection, and estate recovery defense. They help families implement strategies before Medicaid enrollment and fight MERP claims after death. Their role is especially important in states with low hardship waiver approval rates.
Hospice providers deliver medical care and comfort services to terminally ill patients. They do not participate in estate recovery, do not file MERP claims, and have no role in the financial process.
Court Rulings That Shaped Estate Recovery Law
Arkansas Department of Human Services v. Ahlborn (2006) — The U.S. Supreme Court ruled that Medicaid’s recovery rights are limited to the portion of a settlement or estate that represents medical expenses only. States cannot claim portions of an estate meant for pain and suffering or other non-medical damages. This case set a nationwide precedent for limiting Medicaid’s reach.
Estate of Barg v. Department of Human Services — In this Minnesota case, the court upheld the state’s right to use an expanded definition of estate that includes joint tenancy assets. This ruling confirmed that Minnesota’s aggressive approach to pulling non-probate assets into the recoverable estate was legal under OBRA ’93.
The Stinson case in Mississippi addressed the conflict between Medicaid estate recovery and state homestead exemptions. The court examined whether Medicaid could place a lien on homestead property when state probate law designated the homestead as exempt from creditor claims. This case highlighted the tension between federal MERP mandates and state property protections.
The MERP Process Step by Step
Step 1: Medicaid recipient passes away. The nursing facility or hospice agency may be required to notify the state of the death. In South Dakota, this notification must happen within 15 days.
Step 2: State reviews Medicaid payment history. The state’s Medicaid agency calculates the total amount paid for the deceased person’s long-term care, HCBS, and any other recoverable services. This includes managed care premiums in states that recover those.
Step 3: MERP notice is sent. The state sends a letter to the estate executor or family member. The letter details the amount owed and the family’s right to contest or apply for a hardship waiver.
Step 4: Family responds. The family can pay the claim, negotiate, apply for a hardship waiver, present an exemption (such as surviving spouse), or dispute the amount. The response deadline varies by state.
Step 5: Probate proceedings. If the estate goes through probate, Medicaid files its claim with the probate court. The court determines Medicaid’s priority among other creditors.
Step 6: Asset distribution or sale. If the estate has enough assets, Medicaid is paid from the estate. If the primary asset is the home, the home may be sold to satisfy the claim. Remaining assets, if any, go to the heirs.
Step 7: Case closed. Once Medicaid receives its payment — or determines the estate has insufficient assets — the case is closed. The state cannot pursue heirs personally for any remaining balance.
FAQs
Does hospice itself do estate recovery?
No. Hospice providers deliver medical care only. They do not file financial claims against estates. Medicaid’s estate recovery program handles all repayment efforts after a beneficiary dies.
Does Medicare hospice trigger estate recovery?
No. Medicare does not have an estate recovery program. Only Medicaid-funded services can trigger estate recovery claims against a deceased person’s estate.
Can Medicaid take my house after hospice?
Yes, if Medicaid paid for hospice or long-term care and no federal exemption applies. The home is the most common asset recovered through MERP.
Does MERP apply if my spouse is still alive?
No. Federal law prohibits estate recovery while a surviving spouse is living. Some states pursue recovery after the surviving spouse dies.
Can I protect my home with an irrevocable trust?
Yes, if the trust is created at least five years before applying for Medicaid. Assets inside an irrevocable trust are not part of the recoverable estate.
What is the Medicaid look-back period?
Yes, it exists in all states. Medicaid reviews asset transfers made within five years of a long-term care application and penalizes improper transfers.
Does a Lady Bird deed protect against MERP?
Yes, in probate-only states. A Lady Bird deed transfers the home outside of probate at death, keeping it beyond Medicaid’s recovery reach.
Can Medicaid recover more than it paid?
No. Medicaid can only recover the exact amount it spent on the beneficiary’s care. It cannot claim more than the estate is worth either.
Are life insurance proceeds subject to MERP?
No, if a beneficiary other than the estate is named. Life insurance paid to a named person bypasses the estate and avoids recovery.
Does MERP apply to all Medicaid recipients?
No. Federal law targets recipients age 55 and older or those permanently institutionalized. Some states expand this to other populations.
Can I apply for a hardship waiver after receiving a MERP notice?
Yes. Every state must offer a hardship waiver process. Deadlines vary — some states allow only 30 days to file the application.
Is MERP the same in every state?
No. Each state sets its own rules for estate definitions, hardship waivers, minimum thresholds, and lien policies within the federal framework.
Can Medicaid place a lien on my home while I am alive?
Yes, if you are permanently institutionalized and no protected person (spouse, minor child, disabled child, or qualifying sibling) lives in the home.
Does a revocable trust protect assets from MERP?
No. Medicaid considers assets in a revocable trust as still owned by the person. Only irrevocable trusts provide protection from estate recovery.
What happens if the estate has no assets?
No recovery occurs. If the deceased person had no assets or all assets were exempt, the state closes the case and heirs owe nothing.