Alaska's Medicaid Estate Recovery Program

Medicaid is a joint federal and state program that helps pay medical costs for people who can't afford them. It's fairly common for people to seek Medicaid benefits when they need long-term care services because of advanced age or disability.

Medicaid is a costly program, and federal law requires every state to have a "Medicaid Estate Recovery Program." Although these programs differ somewhat from state to state, in Alaska, after your death, your survivors might need to repay Medicaid for services you received.

When you apply for Medicaid, the Alaska Department of Health (DOH) Division of Public Assistance (DPA) gives you information about the estate recovery program. By signing your Medicaid application, you agree to abide by the program's terms.

Understanding the basics of Alaska's Medicaid Estate Recovery Program and letting family members know what to expect will help avoid unpleasant surprises after your death.

Which Medicaid Expenses Must Be Repaid in Alaska?

Federal law requires Alaska to seek repayment for the cost of all long-term care services paid for by Medicaid, including any related drug and hospital benefits. States can, but aren't required to, recover some other Medicaid costs as well. (42 U.S.C. § 1396p(b).)

Typically, Alaska seeks reimbursement if you received one of the following Medicaid services after you turned 55:

• long-term care services in a medical institution, such as a nursing home, or
• home and community-based services (HCBS). (Alaska Stat. § 47.07.055(e).)

If you become permanently institutionalized, Alaska's Medicaid program can try to recover its cost no matter how old you were when you received Medicaid services. (7 Alaska Admin. Code § 160.220.) State law also allows DOH to place a lien on your home in this situation. This doesn't happen frequently, but it's possible. (Learn more about how Alaska handles Medicaid recovery liens below.)

The state won't seek repayment if you're an Alaska Native or Native American Indian and you received services from a tribal health program or from certain other Indian Health Service (IHS) providers. Other exemptions from recovery are discussed below.

What Assets Will Alaska Go After for Medicaid Recovery?

In Alaska, DOH usually seeks recovery only from assets that pass through probate—that's the court procedure for winding up someone's financial affairs after death. Property that goes through probate can include any of the following:

• homes
• land
• bank accounts
• vehicles
• cash
• household goods, and
• other assets.

If you arrange to leave your property to your heirs in a way that avoids probate—for example, through joint tenancy or a living trust—it's unlikely that the state will pursue it. And if your probate estate doesn't have enough value to repay Medicaid, the state won't ask your family to pay any shortfall out of their own pockets.

Learn more about how to leave property to your heirs without going through probate.

Can Medicaid Take My House Before I Die?

No. But if you become permanently institutionalized at any age, the state can place a lien on your house at the time your Medicaid benefits begin. When your house is sold, either before or after your death, the state will recover the Medicaid funds paid on your behalf from the sale proceeds.

Federal Medicaid estate recovery laws prevent the state from placing a lien on your house if certain close relatives live in it, including:

• your spouse
• your child(ren) under the age of 21
• your permanently disabled or blind adult child
• a sibling with an ownership interest in the home who lived there for at least a year before you began receiving long-term care services, or
• your adult child who was living in the home for at least two years before you entered the care facility and provided you with care that delayed your need to live in a nursing home or other medical facility.

Alaska Medicaid must also remove any lien placed on your home if you're discharged from the medical institution and return home. (42 U.S.C. §1396p(a)(2).)

Under Alaska law, you and/or your heirs have the right to appeal a Medicaid lien, including contesting the assessed value of the home or whether it's part of your estate. (7 Alaska Admin. Code § 160.230.) For more information about Medicaid liens in Alaska, contact the DOH, using the information at the end of this article.

Could My Estate Be Exempt From Alaska's Medicaid Estate Recovery Program?

The state of Alaska won't usually seek repayment of the Medicaid benefits you've received from your estate if you're survived by:

• your spouse
• a child under the age of 21, or
• a blind or disabled child of any age.

And the DOH won't file a claim against your estate if it isn't worth enough. To be subject to Medicaid recovery in Alaska, the state must be able to collect more than twice the cost of pursuing recovery, with a minimum value of $10,000. (7 Alaska Admin. Code § 160.210(c).) Medicaid's costs factored into this decision include all:

• tracking property with lien potential and monitoring its recovery
• filing and enforcing a lien
• legal representation for the state
• repairs to make the property saleable
• insuring the property, and
• advertising, listing, and selling a house, including closing costs.

What If Repaying Medicaid Would Cause My Family Hardship?

If DOH decides that repayment would create "undue hardship" for your family, Alaska Medicaid might not recover anything from your estate. DOH will allow a hardship exemption (called a waiver) if any of the following are true:

• your estate's only asset produces income, and taking that asset would cause one or more of your heirs to lose their livelihood
• estate recovery would deprive an inheritor of necessities of life—including food, shelter, clothing, or medical care—putting the individual's health and safety at risk
• an inherited home is of only modest value—meaning it's worth 50% or less of the average price of homes in the surrounding community, or
• the estate's only significant asset is an inherited home, and either:
• losing the asset would make the inheritor eligible for public assistance, or
• receiving the property would enable the inheritor to discontinue public assistance. (7 Alaska Admin. Code § 160.240(b).)

Your estate representative should notify the state of Alaska that one or more of your heirs might be eligible for a hardship waiver. DOH will work with the estate representative to determine whether the estate qualifies for a full or partial hardship waiver, and which inheritors should benefit from it.

Who's Responsible for Paying Back Medicaid in Alaska?

This job falls to the person in charge of wrapping up your estate—often your spouse or the executor of your will. This estate representative must contact each of your creditors, including Medicaid, to pay your bills using the assets you leave behind.

If your representative doesn't contact DOH, nothing more will happen unless and until the department files a claim against your estate. Here's how that works:

In Alaska, DOH keeps track of all deaths that occur in the state. When the estate of a Medicaid recipient goes into probate, the Division of Public Assistance (DPA) files a claim against the estate for the money owed.

If your estate doesn't go through probate court—for example, because you don't own a home and have very little personal property, or because most of your property passes through joint ownership or a living trust—the state won't file a claim, and your estate usually won't have to repay Medicaid.

The person in charge of your estate shouldn't distribute money or other assets from your estate until after making any required repayments to Medicaid. A representative who distributes an estate to the heirs and later finds there aren't enough assets left to pay back Medicaid might be personally responsible for the bill.

Where Can I Get More Information About Alaska Medicaid Recovery?

For more information about Alaska's Medicaid estate recovery program, contact DOH's Division of Public Assistance by:

• phone at 800-478-7778
• email to [email protected], or
• uploading a written request using DPA's secure document portal.

You can also contact your local DPA office for a referral to someone who can answer your questions about the estate recovery program.