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Estate Recovery

In August of 1993, Congress passed a law that requires states to recover amounts that Medicaid has paid for certain recipients. In South Carolina the Estate Recovery Program went into effect on July 1, 1994. The state will recover amounts paid by Medicaid for services received July 1, 1994 or later.

Estate recovery applies to the following beneficiaries:

  • A person who was 55 years of age or older when he or she received medical assistance consisting of nursing facility services, home and community based service care to include prescriptions and hospital stays associated with either of these services paid by Medicaid; or
  • A person of any age who was an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or long term care facility at the time of death; and, who was required to pay most of his/her monthly income to the facility toward the cost of care.

Recovery may be made only after the death of the decedent's surviving spouse, if one exists, and only at a time when the decedent has no surviving child under age twenty-one or no child who is blind or permanently and totally disabled as defined in Title XVI of the Social Security Act.

Recovery must be waived by the department upon proof of undue hardship, asserted by an heir or devisee of the property claimed pursuant to 42 U.S.C. 1396p(b)(3) and in accordance with the guidance issued by the Secretary of the United States Department of Health and Human Services in the State Medicaid Manual as incorporated into the state plan. The department shall publish and maintain such guidance on the department's web site.

 

When a beneficiary dies, the state files a claim with the probate court against the beneficiary's estate to recover amounts paid by Medicaid for the deceased beneficiary's medical care. An estate is all real and personal property and other assets of the deceased person (recipient) as defined in South Carolina State Law.

This claim will be similar to claims for funeral expenses, attorney's fees to administer the estate, and tax. This claim will need to be satisfied in order to close the estate; however, it may not require the selling of the decedent's home and land if there are other assets available to pay the Medicaid claim. In the event other assets are insufficient to repay the Medicaid claim and/or other expenses of the estate, the Personal Representative (Administrator, Executor, and Executrix) may choose other options to repay the Medicaid debt. The state is not interested in taking title to anyone's home.

For example, John Doe was in a nursing home for the month of July. He died August 3. Medicaid paid $2,000 for his care in July and August. His estate is worth $50,000. Medicaid will recover only $2,000 from his estate, after claims with higher priority (i.e., mortgage, funeral expenses, and probate fees) are paid.

In another example, Joe Smith has been on Medicaid for years. Medicaid has spent $25,000 on the medical services he received since he was age 55. His estate is worth $20,000. The Medicaid program will recover from the remainder of the estate, after claims with higher priority are paid.

 

Estate recovery must be deferred if the beneficiary is survived by a spouse or a child under the age of 21, blind, or permanently disabled.

Estate recovery may be waived if it would create an undue hardship.

Estate recovery may exempt some or all assets of a Medicaid beneficiary who is covered under a Qualified Long Term Care Partnership (QLTCP) Insurance Policy. Estate recovery will not seek adjustment or recovery from the beneficiary's estate to the extent benefits were paid under the QLTCP policy.

(1) With respect to the decedent's home property, if the decedent could have transferred the home property on or after the date of his or her Medicaid application without incurring a penalty under 42 U.S.C. Section 1396p(c) if the property could have been transferred without penalty to a:
 

    (a) Surviving sibling of the decedent who possessed an equity interest in the property and who lived in the home for a period of at least one year immediately prior to the date the decedent was institutionalized; or

    (b) Surviving child of the deceased who lived in the home for a period of at least two years immediately before the decedent became institutionalized and who provided care, which allowed the decedent to delay institutionalization. Does not apply to a child under the age of 21, or a child who is blind or disabled.

However, hardship under this item only applies if the individual to whom the property could have been transferred without penalty is actually residing in the home, at the time the hardship is claimed and this hardship status only protects a homestead of modest value. A homestead of modest value is defined as fifty percent (50%) or less of the average price of homes in the county where the homestead is located as of the date of the beneficiary's death. To the extent the value of the home property exceeds this modest value, that portion is subject to recovery by the department.

(2) With respect to the decedent's home and one acre of land surrounding the house, if an immediate family member:

    (a) Has resided in the home for at least two years immediately prior to the recipient's death;

    (b) Is actually residing in the home at the time the hardship is claimed;

    (c) Owns no other real property or agrees to sell all other interest in real property and give the proceeds to the department; and

    (d) Has annual gross family income that does not exceed one hundred eighty-five percent of the federal poverty guidelines.

(3) With respect to a sole income producing asset:

    (a) An immediate family member's annual gross family income would fall below the federal poverty guidelines or immediate family member agrees to pay all income in excess of one hundred eighty-five percent (85%) of the federal poverty guidelines to the department.

Recovery of medical assistance paid from estates of certain individuals.

 

Contact Information

    SC Department of Health & Human Services
    Estate Recovery
    Post Office Box 100127
    Columbia, South Carolina 29202
    Phone Number: (803) 898-2932
    Fax Number: (803) 255-8225