Medicaid is a joint federal and state program that helps pay medical costs for people who can't afford them. It is particularly common for people to seek Medicaid benefits when they need long-term care services, whether due to age or disability.
It's a costly program, and federal law requires every state to have what's called a "Medicaid Estate Recovery Program." This means that, after your death, your survivors may have to use your assets to reimburse Medicaid for certain services provided to you.
When you apply for Medicaid, the Alaska Department of Health and Social Services (DHSS) 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 the 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?
What assets will Alaska go after for Medicaid recovery?
Can the state take my house during my life?
Could my estate be exempt from Alaska's Medicaid Estate Recovery Program?
Could my estate be excused from repaying because it would cause hardship for your family?
Who is responsible for making the payment?
Federal law requires Alaska to seek repayment for the cost of all long-term care services paid for by Medicaid, including related drug and hospital benefits. States are allowed, but not required, to recover other Medicaid costs as well.
Typically, Alaska seeks reimbursement only if you received either of the following Medicaid services after you turned 55:
Example: Ellen has been receiving Medicaid assistance since she was 40. After a fall at age 63, she receives Medicaid funded support at home, including Meals on Wheels and help with chores. When she dies at age 65, DHSS seeks reimbursement for the benefits given to Ellen at home during the two years after her fall.
One exception is for people who become permanently institutionalized. If this happens, state law allows DHSS to place a lien on your home, no matter what your age. (To learn more about liens and how they work, see "Can the state take my home during my life?" below.) This doesn't happen frequently, but you should be aware that it is possible.
The state won't seek repayment if you are an Alaska Native or 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.
In Alaska, DHSS usually seeks recovery only from assets that pass through probate -- that's the court procedure for winding up someone's affairs. If you arrange to leave your property in a way that avoids probate -- for example, through joint tenancy or a living trust -- it's unlikely that the state will pursue it.
Property that goes through probate may include homes, land, bank accounts, vehicles, cash, household goods, and other assets. But if there isn't enough property in your probate estate to cover repayment, that's the end of it. Family members do not have to repay Medicaid from their own pockets.
For more information on how to pass property without probate, see How to Avoid Probate on Nolo.com.
No. But if you become permanently institutionalized at any age, the state may place a lien on your house at the time your Medicaid benefits begin. (A lien is a legal claim against a piece of property that ensures a creditor -- in this case, Medicaid – eventually gets paid.) When your house is sold, either before or after your death, Medicaid will turn to the sale proceeds to collect what you owe.
The state can't place a lien on your house if close relatives live in it, including:
For more information about Medicaid liens, contact the Alaska DHSS, using the information at the end of this article.
Yes. Usually, DHSS will not seek repayment from your estate if you are survived by:
No matter what the circumstances, if your estate is worth very little, DHSS may simply decide it is not worth the trouble or expense of trying to collect.
If DHSS decides that repayment would create "undue hardship" for your family, your estate may not owe anything to Medicaid. DHSS may allow a hardship exemption (called a waiver) if any of the following is true:
If your estate representative believes an inheritor may qualify for a hardship waiver, they should ask DHSS about it. DHSS 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.
This job falls to the person in charge of wrapping up your estate. Your representative must contact each of your creditors, including Medicaid, to pay your bills using the assets you leave. That said, if your representative fails to contact DHSS, nothing more would happen unless the department files a claim against your estate. Here's how that works:
In Alaska, the DHSS keeps track of all deaths that occur in the state. When the estate of a Medicaid recipient goes into probate, the DHSS files a claim against the estate for the money owed.
If your estate does not 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 -- no claim will be filed, and your estate usually won't have to pay.
The person in charge of your estate should not distribute money or other assets from your estate until he or she is certain any required repayments to Medicaid have been made. A representative who later finds that there are not enough assets left to pay back Medicaid may be personally responsible for the bill.
For more information, contact the Alaska Department of Health and Social Services (DHSS) at (907) 334-2400. The office will refer you to someone who can answer your questions about the estate recovery program.
The Alaska regulations related to Medicaid Estate Recovery are contained in Title 7, Sections 160.200-250 of the Alaska Administrative Code.