Medicaid Estate Recovery and You
I hate to be the bearer of bad news but this is something important that you need to know while you can still change the outcome. What I am talking about is the Texas Medicaid Estate Recovery Program (MERP) as it applies to nursing home residents. The Texas MERP program exists to collect what it can from the assets of deceased nursing home Medicaid recipients for the benefits the State paid out to the Medicaid recipient. Medicaid Estate Recovery is real and don’t think that after your parent qualifies for Medicaid that your troubles are over. After they pass away the State will come back and see what and how much they can recover.
Here is a copy of a recent letter from HMS that begins the MERP process: MERP Letter. If your parent has qualified for Medicaid nursing home benefits you should not be surprised when you or your family gets a letter very similar to this one in the future. The question you have to ask yourself is do you want to avoid having to pay the Medicaid Estate Recovery claim to the fullest extent available under the law? If the answer is yes, then you need to take a look at what assets still have the Medicaid recipient’s name on them and evaluate if MERP can reach those assets.
This does not mean removing the Medicaid recipient’s name from assets it is already on. That could be treated as a Medicaid penalty in certain instances and result in a costly interruption of benefits while they are alive. Avoiding Texas Medicaid Estate Recovery without risking a penalty requires a little more finesse than that.
In many cases I can help you avoid MERP through the proper positioning of assets that will not create a Medicaid penalty but will avoid MERP after the Medicaid recipient passes away. If one of the assets involved is a lien free homestead in Texas then the Medicaid Home Protection Deed is an option to consider. If there are other assets involved such as bank accounts you might also be able to protect those as well with the proper strategy.
Just like taxes, the impact of MERP can be reduced or eliminated in many cases. The only difference is if you choose to do something about it. Feel free to contact me if you would like to protect your family’s assets from MERP.