Medicaid Estate Recovery: What Your Family Should Know
When someone on Medicaid dies, the state may try to get back some of what Medicaid paid for their care, out of what they leave behind. This is called estate recovery. It catches many families off guard, especially when the main thing left is the family home. Here's what federal law says states must recover, who is protected, when recovery has to wait, and how hardship waivers work.
AT A GLANCE
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What estate recovery is
Medicaid.gov puts it plainly: state Medicaid programs must recover certain Medicaid benefits paid on behalf of an enrollee. The rules are in section 1917 of the Social Security Act, which is 42 U.S.C. 1396p.
The law starts from a protective rule. Under section 1917(b)(1), no adjustment or recovery of Medicaid correctly paid on someone's behalf may be made, except in the specific cases the law lists. So recovery isn't a general charge on everyone who ever had Medicaid. It applies to certain people, certain services, and only at certain times.
Recovery is a claim against the deceased person's estate, and how broadly "estate" is defined depends on the state (more on that below).
States may not recover from the estate of a deceased Medicaid enrollee who is survived by a spouse, child under age 21, or blind or disabled child of any age. (Medicaid.gov)
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Whose estate is affected
Section 1917(b)(1) names three groups of people whose estates states must pursue.
Group | What the state recovers |
|---|---|
People who were 55 or older when they got the Medicaid services | Nursing facility services, home and community-based services, and related hospital and prescription drug services. Other Medicaid services only if the state chooses. |
People permanently in a nursing facility or other medical institution (any age), when the state placed a lien on their home | Recovery from the estate, or when the property under the lien is sold |
People who used certain long-term care insurance policies to protect assets | Nursing facility and other long-term care services, unless their state has a qualifying long-term care partnership |
The age 55 rule in practice
For most families, the age 55 rule is the one that matters. If your parent started getting Medicaid-paid home care, adult day services or nursing home care at 55 or older, the state is required to seek repayment for those services after death.
Whether doctor visits and other ordinary Medicaid services are also recovered depends on your state. Federal law lets states go further, to "any items or services under the State plan." The one federal exception is Medicare cost-sharing, such as premiums and copays Medicaid paid through a Medicare Savings Program. Medicaid.gov confirms states can't recover those.
Medicaid paid in error is different
Estate recovery covers Medicaid that was correctly paid. Benefits paid incorrectly are a separate matter. Medicaid.gov notes states may place liens for benefits incorrectly paid under a court judgment.
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Who is protected
The protections in section 1917(b)(2) are the most important part of the law for families. Recovery can only happen after the death of the surviving spouse, if there is one. And it can only happen at a time when there is no surviving child who is:
Under age 21, or
Blind, or
Permanently and totally disabled, or disabled under Social Security's definition, depending on the state
Who survives the Medicaid enrollee | Can the state recover now? |
|---|---|
A spouse | No. Recovery waits until after the spouse dies. |
A child under 21 | No, not while the child is under 21 |
A blind or disabled child of any age | No |
Only adult children who aren't blind or disabled | Yes, unless a hardship waiver or another exception applies |
No close relatives | Yes |
The spouse rule is a delay, not a permanent exemption. Federal law says recovery may be made "only after the death of the individual's surviving spouse." Depending on how your state defines the estate, it may be able to make its claim when the second spouse dies.
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The home and nursing home liens
Most of the time, the state can't put a lien on someone's property while they're alive. Section 1917(a) allows only two exceptions: a court judgment for benefits paid incorrectly, and a lien on the home of someone permanently in an institution.
When a lien on the home is allowed
The state can place a lien on the home of a Medicaid enrollee who is an inpatient in a nursing facility, an intermediate care facility for people with intellectual disabilities, or another medical institution, when two things are true:
The person must spend all but a minimal amount of income for personal needs on the cost of their care, and
The state decides, after notice and an opportunity for a hearing, that the person can't reasonably be expected to be discharged and return home.
If you get notice that the state plans to make this finding, that hearing is your chance to object, for example if there's a real plan for your relative to come home.
Who stops a lien on the home
No lien can be placed on the home if any of these people are lawfully living there:
Person living in the home | Condition |
|---|---|
Spouse | None |
Child | Under 21, or blind or disabled |
Sibling | Has an equity interest in the home and lived there for at least one year right before the person entered the institution |
If the person is discharged and comes home, the lien must dissolve. Medicaid.gov says states must remove it when the enrollee leaves the facility and returns home.
Protections for caregivers in the home
Even when a lien was placed, the state can't recover from the home while certain relatives still live there. Under section 1917(b)(2)(B), recovery on a lien has to wait while either of these people lives in the home and has lived there continuously since the person went into the institution:
A sibling who lived in the home for at least one year right before the admission
A son or daughter who lived in the home for at least two years right before the admission, and who shows the state they provided care that let the parent stay home instead of going into an institution
If you moved in to care for a parent, keep records that show it, such as mail at that address, a doctor's note about the care you gave, or a care plan that names you. You may need to prove both the two years and the caregiving.
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What counts as the "estate"
This is where states differ the most. Under section 1917(b)(4), every state's definition must include everything in the person's estate under state probate law: real and personal property and other assets.
States can also choose a wider definition. They may include any other real and personal property and assets the person had legal title to or an interest in at death, including assets that passed to a survivor, heir or assign through:
Joint tenancy or tenancy in common
Survivorship
A life estate
A living trust
Other similar arrangements
So in a state that uses only the probate definition, a house that passes directly to a co-owner outside probate may be out of reach. In a state that uses the wider definition, the state may be able to claim the person's share. Ask your state Medicaid agency which definition it uses.
Trusts
Medicaid.gov notes that under certain conditions, money left in a trust after the enrollee dies may be used to reimburse Medicaid. For example, section 1917(d)(4)(A) allows a trust for a disabled person under 65, but the state must receive whatever is left in it at death, up to the total Medicaid paid for that person.
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Hardship waivers
Section 1917(b)(3) requires every state to set up procedures to waive recovery when it would cause an undue hardship. Each state's criteria follow standards set by the federal government, so the exact rules and forms vary.
Federal law also requires states to exempt certain income, resources and property of American Indians and Alaska Natives, because of the federal responsibility for tribes and Alaska Native villages.
If recovery would leave a family member without a home or unable to meet basic needs, ask the state for its hardship waiver application and its deadline as soon as you get any estate recovery notice. Don't assume it will be granted automatically.
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Long-term care insurance partnerships
Some states have a qualified long-term care insurance partnership. If your relative bought a qualifying partnership policy, part of their assets may have been disregarded for Medicaid eligibility, equal to the benefits the policy paid out. In those states, the special recovery rule for long-term care insurance in section 1917(b)(1)(C) doesn't apply. Check the policy papers and ask the state Medicaid agency how partnership protection affects recovery.
Your checklist
☐ Find out what age your relative was when Medicaid long-term care started
☐ Write down who survives: a spouse, children under 21, or any blind or disabled child
☐ Ask the state Medicaid agency whether it recovers beyond long-term care services
☐ Ask whether it uses the probate-only or the wider definition of estate
☐ Collect proof if you lived in the home as a caregiver (two years) or as a co-owning sibling (one year)
☐ Request the hardship waiver form and its deadline in writing
WHAT TO DO THIS WEEK
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More help
Related guides
Official sources
Last checked: October 30, 2026. The overview, the Medicare Savings Program exception, trusts and lien removal come from Medicaid.gov. Who is covered, the protected relatives, liens, the caregiver and sibling rules, the definition of estate, hardship waivers and long-term care partnerships come from section 1917 of the Social Security Act.
This is general information, not legal advice. Estate recovery rules vary by state. For your family's situation, talk to your state Medicaid agency or a legal aid or elder law attorney.
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