MEDICAID ESTATE RECOVERY IN TEXAS

Posted by on Jul 14, 2011 in Estate Planning

“THE LEGAL CORNER”

By Sam A. Moak

MEDICAID ESTATE RECOVERY IN TEXAS

The information in this column is not intended as legal advice but to provide a general understanding of the law.  Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.

As Texans, we are staunch defenders of our property rights.  Anyone who disagrees should look back on the public reaction to the Texas Trans-Corridor project.  However, Texans have a fairly new threat that affects their property rights, Medicaid estate recovery.  Federal law (the Omnibus Budget Reconciliation Act of 1993 or OBRA 1993 – Public Law 103-66) requires states to recover from the assets of deceased Medicaid recipients the costs of certain services paid by Medicaid on their behalf.

The Texas Legislature attempted to pass an estate recovery law in 1987.  The law was repealed in 1989 and the legislator who authored the law lost his seat in the Texas Legislature. Because of this, Texas declined to implement OBRA 1993.  Texas ran the risk of losing the federal Medicaid funding.  We were not alone. Georgia and Michigan also elected not to implement an estate recovery process.  But on June 2, 2003, the 78th Texas Legislature enacted House Bill 2292, which directs the Texas Health and Human Services Commission (HHSC) to implement estate recovery as required by the federal statute.  This became law on September 1, 2003.

Some states use another federal law, the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 or Public Law 92-248, to place a pre-death lien against the Medicaid recipient’s home.  Texas has not used TEFRA liens to date and it is not referenced in House Bill 2292.  However, Texas has recently implemented post-death liens placed against the homes of deceased Medicaid recipients.

The family of the deceased Medicaid recipient, or sometimes the nursing home, receives a notice of intent to recover the costs of certain services paid by Medicaid.  Certain waivers or exemptions do exist; however, the notice must be responded to in a timely manner or the family may not be granted a waiver or exemption.

The federal guidelines place certain restrictions on when a state may pursue recovery or impose liens.  I cannot stress enough the importance of responsible, long-range planning, to ensure most of your assets pass to your heirs according to your wishes.  Planning must start early, well before you are in need of medical care or Medicaid.  Therefore, do not hesitate to begin planning.

If you have a question regarding Elder Law, Estate Planning, Living Trusts or Probate in the Huntsville area, please contact us at 936-295-6394 or visit our website.  We look forward to hearing from you and assisting you with any and all elder law and estate planning needs.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C.  He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.www.moakandmoak.com