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the trust was funded with the assets of the deceased at
any age. Federal law does not require, but does allow,
each state to seek recovery against real property for which
a lien has been placed at any age as part of becoming
eligible for nursing home Medicaid and against the
estates of beneficiaries who received non-long-term care
Medicaid benefits after age 55.
Probate Notice Requirement - If your estate is filed
for probate in Alabama, state law now requires that the
Alabama Medicaid Agency be given a special notice that
the case has been filed. This requirement applies to all
probate estate filings even if the deceased never received
any Medicaid benefits. This enables the Agency to file
a claim for repayment from your probate estate of some
categories of benefits that have been paid for you by
Medicaid during your lifetime.
What Assets Are Subject to Estate Recovery - Only
real and personal property that is part of your probate
estate is subject to estate recovery. Assets that that pass
automatically outside of probate, such as bank and
investment accounts that are held in joint names with
survivorship, retirement accounts and insurance policies
that have named beneficiaries (other than your estate as
beneficiary), and real property in which you have title
only to a life estate or that your own jointly with the right
to survivorship are not part of your probate estate and are
not subject to Medicaid estate recovery.
Medicaid Benefits That Can Be Included in Alabama
Estate Recovery and Lien Claims - In addition to
including the costs paid after age 55 by Alabama Medicaid
for nursing home services and for case management and
home care services under the Medicaid waiver program
and all Medicaid costs against the remaining assets of
first-party special needs trusts as required by federal law,
Alabama has elected to recover all Medicaid costs of
any kind that can be recovered from real property upon
which a Medicaid lien was placed as part of the eligibility
process for nursing home Medicaid and also all costs of
all non-long-term care Medicaid benefits received after
age 55 from the probate estates of Medicaid beneficiaries,
but state law now prohibits recovery of the costs of
certain benefits, and federal law and state regulations also
provide for certain waivers and delays of estate recovery.
Costs That Cannot Be Included in Estate Recovery -
Effective with September 1, 2019, state law prohibits
the recovery of all Medicare cost-sharing and benefits
paid by Alabama Medicaid under the QMB, SLMB, and
QI programs. This means that whatever Medicaid may
have paid for your Medicare premiums, deductibles, and
co-payments under Medicare Parts A and B at any age
during your lifetime cannot be included in the estate
recovery claim. Because the extra help that you may have
received for your prescription coverage under Medicare
Parts C or D because you were eligible for QMB,
SLMB, or QI, are federal benefits that are not actually
paid by Medicaid, the cost of these benefits are also not
included in estate recovery. Unfortunately, this state
statutory exemption does not apply to recoveries made
against real property that is subject to a Medicaid lien
or to recoveries form QIT and first-party special needs
trusts. For this reason, you should seek very specialized
legal advice before agreeing to have a lien placed on real
property or to funding a first-party special needs trust
when applying for nursing home Medicaid if you have
been eligible for QMB, SLMB, or QI prior to admission
to the nursing home because this may immediately make
a large amount of benefits be subject to recovery under
the lien or through the special needs trust that would
otherwise have been exempt.
Waivers of and Delays in Liens and Estate Recovery -
Estate recovery can be waived with respect to an individual
beneficiary or distributee of an estate if estate recovery
would result in an undue hardship, which is a severely
limited exemption under Alabama Medicaid regulations.
The beneficiary must have an income below 141%
of the federal poverty level ($1500 monthly in 2020).
Foreclosures on liens and estate recovery are not waived,
but are only delayed with respect to the home if the home
is occupied by a surviving spouse, minor or disabled
child, by a sibling with an equity interest who resided in
the home for at least one year prior to eligibility for longterm
care Medicaid, or by a child who lived in the home
and provided care for at least two years immediately prior
to eligibility of the deceased for nursing home Medicaid
or Medicaid waiver that a physician certifies delayed the
need for long-term care for that period of time. Note
that the property could have been transferred to these
persons without a Medicaid transfer penalty at the time
of eligibility, which would have completely eliminated
estate recovery against the home in those cases.
Medicaid Benefits That Are Subject to Liens and Estate
Recovery - In summary, Alabama Medicaid can recover
at your death the costs of all Medicaid benefits of every
kind from property that is subject to a Medicaid lien and
from first-party special needs trusts, all long-term care
benefits that you received after age 55, and all Medicaid
benefits that you received after age 55 while you were not
also eligible for Medicare, typically while you received
SSI disability benefits prior to becoming eligible for
Medicare.
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