Will proposed changes to medical estate recovery laws swallow what is left of your estate?

The Pennsylvania Department of Public Welfare (DPW) has a repayment requirement for anybody who receives Medicaid after the age of 55 called Medical Assistance Estate Recovery (MAER).

Under MAER, the DPW can seek repayment for the amount of medical assistance (Medicaid) paid out for long term care related services provided on behalf of certain recipients.  Since repayment does not happen until after a person has died, some people refer to MAER as the Medicaid death tax.

Current law states that the state can make a claim against a deceased person’s probate estate.  Only items in probate could be used for repayment.  However, a bill has been introduced that would expand Medicaid Estate Recovery to non-probate assets.

Non-probate assets that could be targeted under the new bill – if it passes – include real and personal property held in joint names, life estates, and other traditionally exempt forms of ownership.  In addition, the bill would give Pennsylvania expanded lien powers and control over disputes.

This could spell bad news for many elderly citizens, especially surviving spouses.  Imagine if your spouse was to die, and because of this new law you lost your home and much of the remaining estate to the government.  It is a frightening scenario to consider.

If you are concerned about losing your non-probate estate to the government, talk to your state senators and representatives about this bill (HB 1351, section 1214).  If you have questions about asset protection and planning for future health-care costs, talk to a knowledgeable elder law and estate planning attorney like those at Shields and Boris.