Texans who are concerned about health care costs should understand the options available to them. Depending on their financial situation, there are programs that can provide them with the needed services even if they do not have the money or insurance coverage to pay for it. Often, they will use Medicaid. Even if they are approved for Medicaid, a common concern is how getting it will impact their estate after they are gone.
Understanding the Medicaid Estate Recovery Program and its impact
The Medicaid Estate Recovery Program (MERP) is used by Texas and other states to get money back for services provided. The amount it asks for – or if it asks for repayment at all – hinges on the circumstances. People age 55 and above who received services could be subject to MERP. They must have applied after March 1, 2005.
After getting these services, the estate could be used to repay what the state says it is owed. It only applies to some properties. If, for example, the person has a life insurance policy to be paid to another person when they die or bank accounts that will paid upon their death, these cannot be recovered under MERP.
Situations when the state does not request repayment include the person who received MERP having a spouse who is alive; having a child under 21; having a child who is disabled according to Social Security criteria or who is blind; having an estate worth $10,000 or less; using Medicaid services that cost $3,000 or less; having an unmarried adult child lived with the person for a minimum of one year prior to death; or the cost of the property being sold is more than it is worth.
People who fall under the definition of undue hardship could also be free from repaying for Medicaid through MERP. That includes situations such as the property being a family business farm; leaving the family in need of financial assistance after the MERP claim; losing government assistance because of the MERP claim; and other reasons. The state might also lower what is owed for home maintenance payments and direct payments for care.
Understanding MERP and handling challenges may require experienced help
Losing a loved one is difficult enough without getting notification from the state that it is filing a MERP claim. A large part of the estate could be in jeopardy. When planning for long-term care through Medicaid and preparing for how it might affect the estate after death, it is imperative to have professional assistance with Medicaid and elder law to maintain as much of the estate as possible and perhaps avoid MERP altogether.