Proposed Medicaid recovery regulations change the definition of ‘estate’



In an effort to seek further reimbursement for Medicaid expenses incurred during a recipient’s lifetime, New York passed a law in the 2011 budget regarding estate recovery from Medicaid recipients.

Emergency regulations implementing the law were adopted on September 8, 2011. By their nature, those regulations expired ninety (90) days after their issuance.

However, new regulations have been proposed by the New York State Department of Health, which if adopted, will affect estates of persons dying on or after July 1, 2012. These regulations completely redefine the meaning of “estate” by expanding the number and types of assets from which New York State can collect after the death of a Medicaid recipient, and reducing what the appointed beneficiaries are eligible to receive.

Before the law

In New York State since 1994, only the Medicaid recipient’s probate or intestate estate was subject to recovery by Medicaid.

A probate estate consists of assets passing by virtue of a valid will.

An intestate estate differs in that the owner of the estate dies owning a property without having made a valid will. In such cases, state law determines who receives the assets and property.

What is proposed to be changed

Under proposed regulations, the term “estate” for Medicaid recovery purposes now encompasses: jointly owned bank accounts, jointly owned real property, interests in a trust, life estates of the individual and/or the individual’s spouse, retirement accounts and annuities.

With the inclusion of life estates in the proposed regulations, interests in real property would be sought for recovery by Medicaid.

The value of one’s life estate would be determined immediately before the recipient’s death based on the actuarial life expectancy of the recipient or the recipient’s spouse.

Those Medicaid recipients or their spouses who have turned over their property through a deed with retained life use to specified beneficiaries, including their children, would likely be affected by the proposed regulations.

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