Introduction

Medicaid estate recovery, mandated by federal law, requires states to pursue payback for certain Medicaid benefits from the estates of deceased beneficiaries. This policy perpetuates inequities and deepens existing disparities by deterring access to essential services, hindering intergenerational wealth accumulation, and exacerbating financial and housing instability for surviving family members.

Although recovery is mandatory for certain benefits, many states have exercised the flexibility to expand their policies beyond federal minimums. At the same time, there are also opportunities to mitigate harm of recovery through more expansive protections like hardship waivers. This guide equips advocates with strategies to mitigate the harmful effects of Medicaid estate recovery by examining state practices and identifying opportunities for advocacy. It explores key areas such as narrowing the scope of recovery, enhancing hardship waivers and deferral protections, implementing cost-effectiveness thresholds, and improving public transparency and accessibility through enhanced reporting, training, and notice requirements.

Table of Contents

What is Medicaid Estate Recovery?

Since 1993, federal law has required states to seek recovery of certain Medicaid payments from the estates of beneficiaries after their death.[1] Notably, no other public benefit program requires correctly paid benefits to be repaid. States must recover the costs for long-term services and supports (LTSS)- including institutional care, home- and community-based services, and related hospital and prescription drug services provided to individuals 55 or older.[2]

States also have the option to go beyond these federal minimum requirements and recover costs for other Medicaid state plan services provided to beneficiaries age 55 and older.[3] Currently, 36 states opt to recover costs beyond what federal law requires (See Table 1).[4] In all cases, recovery is limited to the deceased recipient’s estate.[5] Importantly, Medicare cost-sharing amounts paid for by Medicare Savings Programs are not subject to recovery.[6]

Table 1: State Recovery Policies[7]

States That Recover Beyond Federal Minimums

Alabama, Alaska, Arizona, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Washington, West Virginia, Wisconsin, and Wyoming.

States That Only Recover for Mandatory Services

Arkansas, California, Colorado, Connecticut, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, South Dakota, Texas, and Vermont.

Rationales for Medicaid Recovery are Unsound

Proponents of Medicaid recovery argue that the policy promotes program integrity and supports Medicaid’s financial sustainability. However, data demonstrates minimal financial returns from Medicaid recovery programs, with recovered funds accounting for only 0.1% of national Medicaid spending in 2019.[8] Even in the states with the highest recovery amounts, recovered funds accounted for less than 1% of state Medicaid spending.[9] Considering the significant administrative costs of pursuing recoveries, net recovery is further reduced, yielding limited financial benefit for states.[10]

The Realities of Recovery in Practice: Kansas

A recent Office of Inspector General report labeled Kansas’s Medicaid estate recovery program “cost-effective,” but a closer look shows minimal financial returns with a disproportionate impact on poor families. Of the thirty Medicaid recovery cases examined, Kansas recouped only 2.7% of incurred Medicaid costs, which does not account for the state’s administrative expenses associated with recovery. Most estates included in the sample were valued under $11,000, with a median asset value of just $1,532. In many cases, the state collected only small sums—sometimes just a few hundred dollars— while forcing families to forfeit their remaining assets, including a family home, to repay Medicaid claims. See Justice in Aging’s rebuttal of the OIG report’s cost-effectiveness findings for Kansas’s Medicaid recovery program here: When States Recoup Medicaid Costs by Seizing Family Homes, Poor Families Suffer While State Budgets Are Barely Affected.

Medicaid recovery penalizes the lowest-income individuals while allowing wealthier individuals to bypass its impact. While Medicaid allows individuals to retain assets using legal mechanisms known as estate planning, these typically require help from a lawyer, which lower-income individuals often cannot afford. Without access to estate planning, many older adults are forced to impoverish themselves to meet Medicaid’s stringent resource thresholds. As a result, recovered estates typically consist of few assets beyond the decedent’s home, which was previously an excludable asset when the person initially qualified for Medicaid.[11] Because the home was not counted toward their eligibility for Medicaid, many individuals and their families are unaware that it is later subject to recovery.

Medicaid Recovery Harms Low-Income Families and Communities of Color

The cost of LTSS is prohibitively high, often far beyond what families can afford. Home health aide services, for example, cost approximately $68,640 per year for 40 hours of care per week, while a private room in a nursing facility averages $116,800 annually.[12] Contrary to common assumptions, Medicare’s coverage of LTSS is limited, employer-based insurance does not cover LTSS, and access to long-term care insurance is minimal and often prohibitively expensive. For example, only 14% of individuals age 65 and older have a private long-term care insurance policy, despite estimates that 70% will need long-term care at some point in their lives.[13] As a result, Medicaid has become the primary payer of LTSS, serving as the only viable coverage option for many individuals.[14]

The harms of Medicaid recovery are significant, deepening inequities in housing and wealth accumulation, while deterring individuals from seeking essential benefits due to fear. Communities of color face heightened harm, as longstanding systemic barriers result in disproportionate impact. Low-income populations are also disproportionately affected, as limited financial resources restrict access to estate planning mechanisms, forcing individuals to impoverish themselves to meet Medicaid’s strict eligibility thresholds.

Medicaid recovery deepens housing and wealth inequities by disrupting a vital pathway for intergenerational wealth accumulation. Homeownership is often the result of decades of monthly mortgage payments, requiring significant personal sacrifice—especially challenging for low-income people. Typically, families can pass down their homes to their loved ones, providing long-term financial stability. Medicaid recovery breaks this chain, forcing families to start over and increasing their risk of housing instability and eviction.

Medicaid recovery disproportionately impacts certain populations, particularly people of color, for whom structural barriers like limited access to credit and discriminatory housing policies have created significant disparities in homeownership and wealth accumulation.[15] The loss of stable housing due to Medicaid recovery further entrenches the racial wealth gap and undermines efforts at the federal, state, and local levels to expand access to affordable housing.

Fear of Medicaid recovery often deters individuals from applying for critical benefits. Individuals want to pass down their home—the asset they have worked so hard to secure and often at great sacrifice—to their families. As a result, many delay or forgo applying for Medicaid benefits entirely.

For low-income individuals, this creates a significant barrier to care, forcing them deeper into poverty by paying out-of-pocket for services, relying on family members for support, or going without care altogether. Without services, health conditions can deteriorate, contributing to the need for more expensive and otherwise preventable hospitalizations and institutionalizations.

Advocate Tip

For a more robust discussion of the harms of Medicaid recovery to use in advocacy efforts, see this co-branded issue brief, Medicaid Estate Claims: Perpetuating Poverty and Inequality for Minimal Return.

Medicaid Recovery Mitigation Strategies

Existing federal statutory authority allows—and in some cases requires—states to implement policies to mitigate the harms of Medicaid recovery for recipients while also reducing administrative burdens for state Medicaid programs.

Justice in Aging conducted a landscape analysis in the fall of 2024 by reviewing Medicaid State Plan documents, state legislation and administrative code, state Medicaid recovery resources (including websites, fact sheets, and notices), and national analyses of Medicaid recovery. The following discussion analyzes these findings to equip advocates with mitigation strategies to reduce the harmful impacts of Medicaid recovery in their states.

Medicaid programs, including their recovery mechanisms, vary significantly from state to state. As a result, whether reforms require legislative action, administrative changes, or a combination of both depends on the state. Once state-level changes are developed, they must be submitted to the Centers for Medicare & Medicaid Services (CMS) for approval, a standard process in Medicaid policymaking.

Advocacy Tip

Use Appendix A to determine your state’s policies and other information on Medicaid recovery.

Strategy: Limit Scope of Recovery

Federal law requires states to recover costs for certain Medicaid services, including nursing facility care, home- and community-based services (HCBS), and related hospital and prescription drug services.[16] States can recover for additional benefits, specifically Medicaid state plan benefits provided to individuals age 55 and older.[17] Thirty-six states currently recover for benefits beyond the federal minimum.[18] To mitigate the impact of Medicaid recovery, states recovering for more expansive benefits should consider limiting recovery to the federal minimum requirements. This mitigation strategy will reduce the number of individuals, and the scope of services, subject to recovery.

For example, Mississippi limits recovery to the federal minimum, specifying recovery “For any individual who received medical assistance at age 55 or older, adjustments or recoveries of payments are made from the individual’s estate for nursing facility services, home and community-based services, and related hospital and prescription drug services” while also reiterating required federal exclusions for Medicare cost-sharing.[19]

Advocacy Tip

Advocates should review their Medicaid State Plan Section 4.17(b), which requires states to specify which services are subject to recovery, how the state defines undue hardship, and specific methodologies the state employs to determine cost effectiveness. [20] Advocates should review Section 4.17 of their Medicaid State Plan to understand the scope of recovery and identify mitigation opportunities. If a state were to change its recovery practices, it would need to seek approval from CMS to amend Section 4.17(b) of its state plan.

Limit Definition of HCBS for Purposes of Recovery

The CMS State Medicaid Manual updated in 2001 defines HCBS for purposes of Medicaid recovery as services “defined in §§1915(c) and (d), 1929, and 1930” of the Social Security Act.[21] Notably, Massachusetts recently proposed narrowing their recovery to only those HCBS services.[22] For states using an alternative HCBS waiver authority besides 1915(c) and (d) and 1929 and 1930 of the Social Security Act, advocates can push to limit recovery to only HCBS as defined in the 2001 guidance. This approach would effectively exclude recovery for HCBS provided under other waiver authorities.

Limit Scope of Recovery in a Managed Care Environment

For states utilizing managed care, limiting the scope of Medicaid recovery presents unique challenges. States can contract with managed care plans or private insurance companies to provide care to specific populations or to all their Medicaid enrollees.[23] Instead of receiving reimbursement for each service delivered, managed care plans are paid a capitated payment, or a fixed monthly rate, per enrollee. In states using managed care models, Medicaid recovery often includes the total capitated payments made to managed care plans, regardless of whether individuals used services equal to those amounts or actually used any LTSS.

When a state opts not to recover for all Medicaid state plan services, it must determine the portion of the capitated managed care payment attributable to recoverable services, such as nursing facility care or HCBS. In states with managed care, six recover for only the portion of the premium attributable to LTSS used by the recipient.[24] This requires an actuarial analysis conducted by the state to calculate the recoverable portion of the capitated payment.[25] In this situation, advocates must ensure their state only recovers for the portion of the capitated payment attributable to recoverable services, rather than the entire capitated payment.

Advocacy Tip

Section 4.17 of the Medicaid State Plan should describe whether a managed care state is recovering the entirety of capitation payments or the portion attributable to LTSS used by the recipient.[26]

Limit Recovery to Probate Assets

States have discretion in defining which assets are subject to Medicaid recovery. While federal law mandates that states recover assets passing through probate, states can expand their scope to include non-probate assets.[27] Probate is a legal process used to settle an estate’s affairs after an individual’s death, including transferring assets and settling outstanding debts.

States like Minnesota have broadened their scope of recovery to include non-probate resources, such as certain trusts and life insurance policies.[28] To mitigate the impact of recovery, advocates can push states to limit their recovery efforts to the federally required minimum: assets that pass through probate under state law. This can exclude assets passing through “living trusts” and joint tenancy. As an example, California, among other states, changed its law to limit recovery to the probate estate.[29]

Strategy: Expand Deferrals

Estate recovery occurs only after the death of the Medicaid recipient. Federal law also requires states to delay recovery in particular instances, including if there is a:

  • Surviving spouse, regardless of where the spouse lives.
  • A child under 21 or a blind or disabled child, regardless of where the child lives.[30]

These circumstances are called deferrals. In most states, deferrals are temporary, and when conditions are no longer met, the state will pursue recovery.

Importantly, undue hardship waiver flexibilities, discussed in more detail below, provide states with opportunities to expand deferral protections. For instance, California and Washington extend deferral protections to domestic partners in addition to spouses. Additionally, Utah and Louisiana both define the presence of a surviving minor or disabled child as undue hardship, therefore exempting these individuals from Medicaid recovery altogether.

Strategy: Expand Hardship Waivers

States must establish procedures to waive recovery in situations where pursuit would result in undue hardship for the heir(s).[31] Federal requirements do not define undue hardship and only specify exemptions for American Indians and Alaska Natives.[32] This leaves states with considerable flexibility in defining instances of undue hardship and the scope of corresponding waivers.[33]

While some states limit hardship waivers to periods when undue hardship exists, many fully exempt the qualifying applicants from recovery.[34] For this analysis, undue hardship waivers are organized into categories, as demonstrated by Table 2: State Hardship Waivers.[35]

Table 2: State Hardship Waivers

wdt_ID wdt_created_by wdt_created_at wdt_last_edited_by wdt_last_edited_at State Income Producing Asset Eligibility for Public Benefits Deprivation of Necessities Homes of Modest Value Caregiver Waiver Income Based Waiver Residence Waiver Other Waivers
1 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Alabama Yes No No No No No No No
2 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Alaska Yes Yes Yes Yes No No No No
3 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Arizona Yes No No No No Yes Yes No
4 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Arkansas Yes Yes No Yes No No No Yes
5 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM California Yes Yes Yes Yes Yes No Yes Yes
6 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Colorado Yes Yes No No No No No No
7 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Connecticut No No No No No Yes Yes Yes
8 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Delaware Yes No No No No Yes No No
9 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM District of Columbia Yes Yes Yes No No No No Yes
10 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Florida No No Yes No Yes No Yes Yes
11 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Georgia Yes Yes No No No No No No
12 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Hawaii Yes No No Yes No No No No
13 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Idaho Yes Yes No No No No No Yes
14 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Illinois Yes Yes No No No No No No
15 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Indiana Yes Yes No No No No No Yes
16 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Iowa No No Yes No No No No No
17 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Kansas Yes Yes No No Yes No No Yes
18 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Kentucky Yes No No No No No No Yes
19 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Louisiana Yes Yes No No No Yes No Yes
20 Sy 03/24/2025 11:08 PM Sy 03/24/2025 11:08 PM Maine Yes No No No Yes No Yes No

Yes – The state provides a full waiver of recovery when undue hardship exists for qualifying applicants.
Yes * – The state offers a temporary waiver (deferral) for as long as undue hardship conditions exist.
No – The state does not offer a hardship waiver of this type.

**Missouri and North Dakota do not offer any hardship waivers in contradiction to federal law. Advocates in those states can work with their state to comply with federal law and develop undue hardship waivers that mitigate recovery as discussed in more detail below. Source: See Appendix A.

Income Producing Asset Waiver

The most common undue hardship waiver, used by forty-one states, is an exemption for an heir’s “sole/primary means of livelihood” or “sole-income producing” asset.[36] While most states provide special consideration for a family farm or business, Minnesota uses broader language specific to the applicant’s “trade, profession, or occupation.” Similarly, Arizona, Minnesota, and New Hampshire increase access to this waiver by lowering the “sole” income threshold to “more than 50 percent” of the heir’s livelihood. To ensure greater accessibility for heirs, advocates should push their states to adopt inclusive hardship waiver language covering a range of income-producing assets and lowering the threshold from “sole” means of livelihood to “primary,” “more than 50 percent,” or a defined percentage of income.

Eligibility for Public Benefits Waiver

States commonly use two similar waivers related to public benefit eligibility and Medicaid recovery. Twenty states use these waivers to address situations where, without access to the estate proceeds, the heir would become eligible for federal or state public benefits, or conversely, where allowing the heir to inherit would disqualify them from such benefits. While states like New Mexico and Virginia suggest that applicants for the waiver would have to become eligible for a particular program, like Medicaid or TANF, most states use broader, more inclusive language like becoming eligible for “state or federal public benefits,” or requiring “financial help from the government” to make this waiver more accessible. Advocates should push their states to adopt broad, inclusive hardship waiver language that expands eligibility beyond specific programs to encompass eligibility for state and government assistance.

Advocates should push their states to adopt broad, inclusive hardship waiver language that expands eligibility beyond specific programs to encompass eligibility for state and government assistance.

Deprivation of Necessities of Life Waiver

Often overlapping with the previous waiver category, thirteen states waive recovery when denying an inheritance would deprive the heir of “necessities of life,” such as food, clothing, shelter, or medical care. States frequently use language like, “recovery would endanger or compromise the health and/or shelter of the applicant.”

For example, Nevada finds hardship when “the financial impact of recovery against immediate family members of the applicant would place them in a financial position of hardship.” New Mexico finds hardship when “the deceased recipient’s heirs would be put at risk of serious deprivation without receipt of the proceeds of the estate,” and Ohio finds hardship when “recovery would deprive the survivor of necessary food, shelter, or clothing. Deprivation does not include situations in which the survivor is merely inconvenienced but would not be at risk of serious harm.” Advocates should push their states to adopt broad and inclusive hardship waiver language that explicitly recognizes the risk of serious deprivation, including loss of food, shelter, clothing, or medical care.

Homes of Modest Value

Ten states waive recovery for “homes of modest value.” While CMS does not specify a precise threshold, federal guidance suggests defining modest value as approximately half the average home value in the county.[37] States utilizing this waiver must outline their methodology for determining “modest value” in their State Plans.[38] For example, Arkansas finds hardship when “the estate asset subject to recovery is a home with a value of fifty percent or less of the average price of homes in the county where the homestead is located.” Advocates should push their states to define “homes of modest value” in the most inclusive way possible to account for rising housing costs.

Caregiver Waiver

Fourteen states recognize the critical role of family caregivers in preventing or delaying Medicaid enrollee institutionalization by offering waivers to exempt or defer estate recovery from caregivers who are heirs. These waivers typically require the caregiver, often an adult child, to have lived continuously in the recipient’s home for a specified period (usually 1–2 years) and provided care that delayed the recipient’s need for Medicaid LTSS. Eligibility criteria often also include documentation of caregiving contributions and proof that the care provided delayed institutionalization. Some states broaden the definition of caregivers to include siblings or grandchildren, while others impose stricter limitations, such as requiring that the care was “unreimbursed,” or limiting eligibility to specific family members. A key distinction across states is whether they provide permanent waivers, which fully eliminate recovery, or temporary waivers, which delay recovery for as long as the caregiver continues to reside in the home. Advocates should push for permanent waivers versus temporary waivers.

Advocacy Tip

Flexible eligibility criteria, such as shorter caregiving periods (one year as opposed to two) and broader definitions of eligible caregivers (adult children, siblings, grandchildren, friends, relatives, or applicants), help expand access to these waivers. Additionally, simplified waiver applications that accept self-attestation of the caregiver’s efforts, instead of requiring a physician to verify the caregiver’s contributions, help improve access.

Income Based Waivers

Seven states use income-based hardship waivers to target mitigation strategies to heirs with limited financial means. Best practices in this waiver category include setting income thresholds that reflect living costs. For instance, Louisiana waives estate recovery for heirs with incomes up to 300% Federal Poverty Level (FPL) in the year before the decedent’s death. Similarly, Vermont allows waivers for heirs with incomes up to 300% FPL, but only if the estate is valued at $250,000 or less. Massachusetts waives $50,000 of the recovery claim for heirs with incomes up to 400% FPL for the two years prior to the claim, with a maximum waiver of $100,000 for multiple qualifying heirs.

Residency Waiver

Sixteen states use residence waivers to protect heirs living in a decedent’s home from recovery. These waivers typically require the heir to have resided continuously in the home for a defined period before the decedent’s death, often 12–24 months, and have no alternative residence. Common requirements also include demonstrating that the heir cannot afford alternative housing or financing to repay the state.

For example, Arizona grants a hardship exemption when an heir was living in the decedent’s home at the time of the waiver application, at the time of the enrollee’s death, and for at least twelve months prior to the enrollee’s death, provided the heir does not own another residence. California finds hardship in circumstances where the applicant is aged, blind, or disabled and has continuously lived in the decedent’s home for at least one year prior to the decedent’s death and continues to reside there, and is unable to obtain financing to repay the state.

Other Waivers

Twenty-four states use a variety of waivers to address “other compelling circumstances” that do not fit within standard hardship waiver categories.[39] These waivers are evaluated on a case-by-case basis, allowing states to consider factors such as the heir’s dependency on the decedent, their financial or medical needs, or the heir’s unique life circumstances. For example, Kansas, Ohio, Pennsylvania, and Texas consider expenses incurred by heirs to maintain the decedent’s home, while Kentucky considers the continuing education and health needs of heirs.

Deferrals Instead of Waivers

While many states use waivers to fully exempt surviving family members from Medicaid recovery, some states only “waive” recovery for as long as the heir continues to meet the eligibility criteria. For example, Washington and North Carolina do not offer waivers that exempt heirs from recovery; instead, all of the state’s waivers are actually “deferrals” for as long as the applicant continues to meet the specified conditions. Importantly, advocates should push their state to provide waivers that fully exempt, as opposed to delay, recovery.

Strategy: Address Barriers to Hardship Waivers

Advocates and heirs frequently report significant challenges with the Medicaid recovery waiver application process, stemming from a lack of awareness about the existence of these waivers. Even when individuals are informed, they encounter cumbersome paperwork requirements and complex bureaucratic procedures that often make the process inaccessible even if they are eligible for the waiver.

States also provide varying amounts of time to apply for hardship waivers, ranging from a mere 20 days in New Jersey to 60 to 90 days in other states. For those able to navigate these hurdles, additional barriers arise as some states fail to process waiver applications promptly or deny waiver applications altogether. Advocates should push their states to provide heirs with more time to apply for hardship waivers and require states to respond timely to applicants’ waiver applications. Advocates should also push for easy-to-find information on state websites and recovery resources on hardship waivers and how to apply.

Illinois state law requires the state to publish, on an annual basis, a public report on the number of Medicaid recovery cases pursued, the number of hardship waivers granted, and accompanying demographic information when available.[40] Between 2022 and 2024, Illinois approved 55%, 75%, and 47% of waiver applications received, respectively. However, only 2-3% of surviving family members applied for hardship waivers during this time, underscoring the significant barriers inhibiting access to the state’s existing waivers.[41] Advocates should urge their states to publish this information annually to assess the policy’s impact and evaluate the accessibility and use of hardship waivers.

Strategy: Expand Cost-Effectiveness Thresholds

Recognizing the significant administrative costs associated with Medicaid recovery, states can adopt strategies to reduce administrative burdens associated with the policy.[42] Table 3 demonstrates significant variation across states in implementing cost-effectiveness strategies, including policies specific to the claim amount, estate value, and net recovery amount. For instance, Mississippi and New Jersey will not pursue estates valued at or below $5,000 and $3,000, respectively, while Georgia, South Carolina, and Massachusetts use an estate value threshold of $25,000, and North Carolina uses $50,000. Similarly, Illinois and Georgia waive claims of up to $25,000, whereas the District of Columbia sets this threshold at just $100.

Advocates can push their states to adopt higher cost-effectiveness thresholds, aligning with best practices like North Carolina’s exclusion of estates valued at less than $50,000 or Illinois and Georgia’s waiver of claims of up to $25,000, to minimize administrative burden and protect heirs.

Table 3: State Cost-Effectiveness Strategies[43]

Disregard or waive claims up to a certain amount

District of Columbia, Idaho, Illinois, Louisiana, Michigan, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Washington

Establish thresholds to exclude estates below a certain value

California, Delaware, Florida, Georgia, Idaho, Kansas, Massachusetts, Mississippi, New Jersey, North Carolina, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Washington, West Virginia

Require recoveries to exceed administrative costs

Alabama, Arkansas, Colorado, Hawaii, Indiana, Kansas, Maine, Michigan, Minnesota, Missouri, Nevada, Virginia, and Wyoming.

Establish a minimum value that must be recovered

Alaska, Connecticut, Louisiana, Nebraska, New Hampshire, New Mexico, South Carolina, South Dakota

No Threshold

Iowa, Ohio, and Oregon

**North Dakota, New York, Montana, and Wisconsin use different criteria outside of these categories to determine cost-effectiveness. The cost-effectiveness strategies for Maryland and Oklahoma are unknown.

Strategy: Improve State Medicaid Recovery Notices and Education

Despite requirements that states provide notice about Medicaid recovery when an individual is applying for Medicaid benefits, many Medicaid enrollees and their family members report being unaware of Medicaid recovery.[44] To improve knowledge and understanding of state Medicaid recovery programs, advocates can encourage their state to:

  • Enhance Medicaid Recovery Notices: Ensure notices about Medicaid recovery are provided at multiple points beyond the initial Medicaid application. The Medicaid application process can be overwhelming, with extensive paperwork and information, making it easy to overlook details about recovery. State advocates have raised concerns about insufficient or unclear notices, which can lead to confusion and, in some cases, legal challenges. Advocates should assess their state’s specific landscape and explore opportunities to improve notice accessibility and clarity to provide the most effective relief.[45]
  • Publish Clear and Accessible Information About Medicaid Recovery Programs: Encourage states to develop and publicly post accessible guides with clear and concise explanations of their Medicaid recovery policies. Materials should be tested with Medicaid recipients before release to ensure their effectiveness and offered in languages reflective of the state’s Medicaid population and alternative formats accessible to people with disabilities.
    • Example: Illinois passed legislation requiring the state to provide information about hardship waivers on its website in English, Spanish, and the next four most commonly spoken languages in the state. The legislation also required Illinois to produce “short guides” describing how heirs can apply for hardship waivers, while also requiring the application process to be “simple” to reduce barriers. [46]
  • Improve Transparency Around Claim Balances: Advocate for policies that allow Medicaid recipients to stay informed about their claim amounts. States can enable individuals to request, or proactively send, an annual statement of the recipient’s claim balance.
    • Example: California residents can request an itemized statement of their Medicaid recovery claim each year.[47]
  • Provide Comprehensive Training for Enrollment Counselors and State Staff: Ensure enrollment counselors and state staff receive thorough training on their state’s recovery policies so they can provide accurate information to Medicaid enrollees and their families. Well-trained staff will be better equipped to accurately answer questions about their state’s Medicaid recovery policies, recognize when an individual may qualify for a hardship waiver, and connect individuals to appropriate resources.

Strategy: Improve Transparency

There are no federal requirements requiring standardized reporting on Medicaid recovery activities. Advocates can often only obtain data on their state’s recovery activities through public records or freedom of information requests. Advocates should urge states to implement annual public reporting on estate recovery data, including the number of estates pursued, the total amount recovered, administrative costs associated with recoveries, and the number of hardship waiver applications received versus granted.

Advocates should encourage states to include the demographic information of waiver applicants to better understand how estate recovery policies and mitigation strategies impact specific communities. Notably, Illinois is the only state currently reporting annually on the number of hardship waiver applications received and granted, and the applicant’s county of residence, gender, and race.[48] Massachusetts advocates have called for the state to provide this level of transparency.[49]

Conclusion

Medicaid recovery perpetuates systemic inequities and disproportionately burdens low-income individuals and communities of color. Advocates can use the mitigation strategies outlined in this brief, such as narrowing the scope of recovery, enhancing hardship waivers, establishing cost-effectiveness thresholds, and improving transparency and accessibility requirements, to reduce the harmful impacts of Medicaid recovery.

Endnotes

  1. Estates include, at a minimum, the beneficiary’s probate estate. The probate estate is defined under each state’s probate code and includes assets solely owned by the deceased that do not have a named beneficiary or joint ownership. Common examples of probate assets include a home, personal property, and bank accounts. ↑

  2. 42 U.S.C § 1396p(b)(1)(B)(i). Related services include any hospital care or prescription services provided to an individual while receiving nursing facility care and/or HCBS. See Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See pages 3-9-3 to 3-9-4. ↑

  3. 42 U.S.C § 1396p(b)(1)(B)(ii) ↑

  4. KFF, “What is Medicaid Estate Recovery?” (September 2024). Since the publication of this report, Massachusetts has elected to limit recovery to what is federally mandated. See Mass. Gen. Laws Ch. 197 (2024), amending Mass. Gen. Laws Ch. 118E § 31. ↑

  5. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See the definition of estate on pages 3-9-6 and 3-9-7. ↑

  6. 42 U.S.C § 1396p(b)(1)(B)(ii) ↑

  7. KFF, “What is Medicaid Estate Recovery?” (September 2024). Since the publication of this report, Massachusetts has elected to limit recovery to what is federally mandated. See Mass. Gen. Laws Ch. 197 (2024), amending Mass. Gen. Laws Ch. 118E § 31. ↑

  8. KFF, “What is Medicaid Estate Recovery?” (September 2024). ↑

  9. Id.; Justice in Aging, “When States Recoup Medicaid Costs by Seizing Family Homes, Poor Families Suffer While State Budgets Are Barely Effected” (May 2024). ↑

  10. MACPAC, “Medicaid Estate Recovery: Improving Policy and Promoting Equity” (March 2021). This report analyzed program administration costs in five states, finding that administrative expenses accounted for between 3.7% and 32.1%, with an average of 11%. ↑

  11. MACPAC, “Medicaid Estate Recovery: Improving Policy and Promoting Equity” (March 2021). ↑

  12. KFF, “10 Things About Long-Term Services and Supports” (July 2024). ↑

  13. KFF, “The Affordability of Long-Term Care and Supports Services: Findings from a KFF Survey” (November 2023); Administration for Community Living, “How Much Care Will You Need?” (February 2020). ↑

  14. Justice in Aging, “Medicaid Home and Community-Based Services for Older Adults with Disabilities: A Primer” (April 2021). ↑

  15. Id.; AARP, “Advancing Racial and Ethnic Equity in Long-Term Services and Supports” (September 2023). ↑

  16. 42 U.S.C § 1396p(b)(1)(B)(i) ↑

  17. 42 U.S.C § 1396p(b)(1)(B)(ii) ↑

  18. KFF, “What is Medicaid Estate Recovery?” (September 2024); Mass. Gen. Laws Ch. 197 (2024), amending Mass. Gen. Laws Ch. 118E § 31. ↑

  19. Mississippi State Plan Title XIX Of the Social Security Act, HCFA-PM-95-3 (May 1995). ↑

  20. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See pages 3-9-4, 3-9-7, and 3-9-8. ↑

  21. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). ↑

  22. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001); Mass. Gen. Laws Ch. 197 (2024), amending Mass. Gen. Laws Ch. 118E § 31(3)(ii). See recovery for “only for medical assistance consisting of nursing facility services, home and community-based services and related hospital and prescription drug services for which estate recovery is mandated under 42 U.S.C. 1396p(b)(1)(B)(i) or other federal law.” At the time of this publication, MassHealth has not updated its state plan and written criteria implementing the state’s new law. MassHealth has confirmed with advocates its intention to narrow the scope of recovery to the definition of HCBS provided in the CMS 2001 guidance document. ↑

  23. KFF, “10 Things to Know about Medicaid Managed Care.” ↑

  24. KFF, “What is Medicaid Estate Recovery?” (September 2024). Since this report was published, Massachusetts also only pursues recovery for the portion of the premium attributable to LTSS services received. ↑

  25. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See page 3-9-5; Centers for Medicare and Medicaid Services, Coordination of Benefits and Third Party Liability (COTPL/TPL) In Medicaid (2020). See page 62. ↑

  26. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See pages 3-9-4, 3-9-7, and 3-9-8. ↑

  27. Centers for Medicare and Medicaid Services, Coordination of Benefits and Third Party Liability (COTPL/TPL) In Medicaid (2020). See pages 64-65. ↑

  28. Minnesota Department of Human Services, “Understanding Medical Assistance Claims”; Massachusetts Foundation et al., “Holding on to Home: A Primer on MassHealth Estate Recovery and Options for Reducing its Impact on Members and Families” (February 2024). ↑

  29. CANHR, “Medi-Cal Recovery: Recovery rules for Medi-Cal beneficiaries who die on or after January 1, 2017” (July 2023). ↑

  30. 42 U.S.C §§ 1396p(b)(2)(A-B); Centers for Medicare and Medicaid Services, Coordination of Benefits and Third Party Liability (COTPL/TPL) In Medicaid (2020). See page 63. ↑

  31. 42 U.S.C § 1396p(b)(3)(A) ↑

  32. 42 U.S.C § 1396p(b)(3)(B); Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See pages 3-9-5 and 3-9-6. ↑

  33. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See page 3-9-7. Specifically, “special consideration of cases in which the estate subject to recovery is: (1) the sole income-producing asset of survivors (where such income is limited), such as a family farm or other family business; (2) a homestead of modest value; or (3) other compelling circumstances.” ↑

  34. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). In addition to granting full waivers, states can offer partial waivers or allow surviving family members to enter into payment agreements to satisfy the claim. ↑

  35. Various state hardship waivers can fit into numerous categories, depending on categorization. The category total reflects the author’s analysis. ↑

  36. Id. ↑

  37. Id.; Centers for Medicare and Medicaid Services, Coordination of Benefits and Third Party Liability (COTPL/TPL) In Medicaid (2020). See page 64. ↑

  38. Id. ↑

  39. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See page 3-9-7. ↑

  40. Illinois General Assembly, 305 ILCS 5/5-13.1: Medicaid Estate Recovery Hardship Waivers and Transparency. ↑

  41. Illinois Department of Healthcare and Family Services, “Hardship Waiver Statistics” (2024). ↑

  42. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See page 3-9-8. ↑

  43. Citations found in Appendix A and MACPAC, “Medicaid Estate Recovery: Improving Policy and Promoting Equity” (March 2021). ↑

  44. Centers for Medicare & Medicaid Services, State Medicaid Manual Part 3 – Eligibility (February 2001). See pages 3-9-8 and 3-9-9. ↑

  45. EOHHS v. Trocki Medicaid Estate Recovery Decision, No. 20-P-1234 (Mass. App. Ct. 2023). ↑

  46. 305 Ill. Comp. Stat. § 5/5-13.1 ↑

  47. DHCS, “Estate Recovery Program.” ↑

  48. Illinois Department of Healthcare and Family Services, “Hardship Waiver Statistics” (2024). ↑

  49. Massachusetts Foundation et al., “Holding on to Home: A Primer on MassHealth Estate Recovery and Options for Reducing its Impact on Members and Families” (February 2024).

Appendix A: Citations for State-Specific Medicaid Recovery Policies

Alabama

Alaska

  • Alaska Admin. Code 7 AAC 160.240
  • Alaska Admin. Code 7 AAC 160.230
  • Alaska State Plan under Title XIX of the Social Security Act TN No. 03-13 (July 22, 2004).

Arizona

Arkansas

California

  • California Department of Health Care Services, “Estate Recovery Program.”
  • California Admin. Code 22 CCR 50963

Colorado

Connecticut

Delaware

District of Columbia

Florida

  • Fla. Stat. § 409.910
  • Health Management Systems on behalf of the Agency for Health Care Administration, “Estate Recovery FAQ.”

Georgia

Hawaii

Idaho

Illinois

305 Ill. Comp. Stat. § 5/5-13.1

Indiana

Iowa

Kansas

Kentucky

  • Kentucky Admin. Code 907 KAR 1:585
  • Third Party Liability Branch, “Estate Recovery.”

Louisiana

Maine

  • Maine Admin. Code 10-144 CMR Ch. 101, Ch. VII Section 5: Estate Recovery

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

  • New Mexico Admin. Code 8.200.430.19

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

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