Will Medicaid Take Your House? Medicaid Estate Recovery Explained

When a Medicaid recipient dies, the state is required by federal law to try to recover what Medicaid spent on the recipient's care from whatever assets the recipient leaves behind. This is Medicaid Estate Recovery, and it has been federal policy since the Omnibus Budget Reconciliation Act of 1993 (OBRA-93). It is one of only two creditor mechanisms that can reach the family home after a parent dies; the other is a properly perfected mortgage. For the millions of American families who care for an aging parent through Medicaid LTSS, nursing-home stays, home- and community-based services, hospital and prescription drug care for the 55-and-older population, estate recovery is the post-script no one reads until it arrives in the mail.

Federal law sets a floor. Beyond that floor, states choose how aggressive to be. The five-state cluster we have written about, Ohio, Tennessee, Massachusetts, New York, California, illustrates the full range of state choice. Ohio elects every permissive expansion Congress allows, sweeping in Transfer-on-Death affidavits, joint tenancy, payable-on-death accounts, and revocable living trusts; it collected approximately $94 million in fiscal year 2024. Tennessee sticks to the federal floor with a $25,000 minimum threshold; it collects in the low single-digit millions. Massachusetts narrowed its scope from expanded to floor in 2024 (Chapter 197 of the Acts of 2024); New York is probate-only but pursues aggressive pre-death TEFRA liens; California eliminated expanded recovery in 2017 (SB 833). Across all 50 states and DC, FY 2019 federal data showed about $733 million in total recoveries, roughly 0.55 percent of total Medicaid long-term services and supports spending in that year, per MACPAC.

That number, half a percent, is the heart of the policy debate. Critics call estate recovery a regressive tax that disproportionately falls on lower-middle-class families with one paid-off home and no estate-planning attorney, while sophisticated families wall their assets off through Medicaid Asset Protection Trusts five years before need. Justice in Aging, the National Consumer Law Center, AARP, NAELA, and others have spent the last decade documenting the harm and pushing for federal repeal. The Stop Unfair Medicaid Recoveries Act (H.R. 6951, 119th Congress), reintroduced by Rep. Jan Schakowsky on January 6, 2026, would do exactly that, eliminate the federal mandate. It has 22 cosponsors as of late April 2026 and no Senate companion; it is not advancing.

Defenders of the program argue that recovery preserves limited Medicaid funds for the most vulnerable, signals that Medicaid LTSS is a loan against later assets rather than a free benefit, and prevents middle-class families from using Medicaid as a pre-emptive estate-planning tool while sheltering assets for their heirs. The middle ground is the policy frontier: most state-level reform proposals (Ohio HB 318 is a representative example) keep the federal mandate but soften the worst edges, minimum-claim thresholds, lien caps on modest homes, narrowed estate definitions.

This guide is the federal hub for everything we publish on estate recovery. It walks through the federal substrate, the state-by-state matrix, the categorical protections, the hardship-waiver framework, the trust and home-equity intersections, the racial and ethnic disparity literature, the tribal property carve-outs, and the planning tools that work in any state versus those that work only where the estate is defined narrowly. For state-specific deep dives, see our Ohio Estate Recovery guide, the broader Massachusetts, New York, and Tennessee state pillars, and the Medi-Cal Recovery coverage in our California pillar.

In This Guide

• 60-Second Version
• Origin: OBRA-93 and the Federal Mandate
• The Federal Floor: What Medicaid Estate Recovery Was Designed to Be (42 USC § 1396p(b))
• The Two Permissive Expansions (Services + Estate Definition)
• State-by-State Matrix
• The Categorical Protections (Spouse, Child, Sibling, Caregiver-Child)
• The Hardship Waiver Mandate (and the Missouri / North Dakota Compliance Gap)
• The Medicare Cost-Sharing Carve-Out (Effective 1/1/2010)
• The Caregiver-Child Lifetime Transfer Exception
• Trust Provisions: How They Intersect with Recovery
• The Home-Equity LTSS Exemption and the OBBBA Cap
• TEFRA Pre-Death Liens: The Lifetime Tool
• The Federal Share Problem: Why States Don't Earn What They Recover
• Medicaid Estate Recovery Dollar Volumes
• The Predatory Critique: Academic and Advocacy Literature
• Race and Ethnicity Disparities
• Tribal Property Protections
• The Five-State Cluster: OH / TN / MA / NY / CA in Detail
• The Other 45 States: Quick Tour
• Planning Tools That Work Everywhere
• Planning Tools That Work Only in Probate-Only States
• Lady Bird Deeds: The Five-State Tool
• Spousal Refusal: NY-Plus
• Reform Watch 2025–2026
• The MACPAC Recommendations Still Pending
• What This Means for Families
• Where to Get Help
• Learn More

Origin: OBRA-93 and the Federal Mandate

Before 1993, Medicaid estate recovery was optional for states. Roughly half had recovery programs of various designs; the rest didn't pursue recovery at all. The Omnibus Budget Reconciliation Act of 1993 (OBRA-93) changed that, making recovery from the estates of certain deceased Medicaid recipients a mandatory condition of receiving federal Medicaid matching funds.

The legislative motivation, as described in House and Senate Finance Committee reports of the era: rapid growth of nursing-home Medicaid caseloads in the 1980s, increasing concern that "Medicaid estate planning" was channeling middle- and upper-middle-class families' assets into protected trusts to qualify for Medicaid LTSS while preserving inheritance for heirs, and a perceived equity argument that Medicaid LTSS should function as a "loan against later assets" rather than a free benefit.

OBRA-93 codified the recovery mandate at 42 USC § 1396p(b). It also tightened the rules around asset transfers (lookback periods), tightened the rules around trusts (the (d)(3) and (d)(4) framework), and tightened the rules around income (the (d)(4)(B) Miller Trust pathway for income-cap states). The 1993 changes were the foundation of modern Medicaid asset protection law.

For the next 30+ years, the federal mandate has remained largely intact. The most significant amendment was the Affordable Care Act § 6021 (effective 1/1/2010), which carved out Medicare cost-sharing benefits (QMB premiums, deductibles, copays) from recoverable services, protecting partial-dual-eligible families from recovery against Medicare-related Medicaid spending.

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), predating OBRA-93, authorized pre-death liens on the real property of permanently institutionalized recipients. Together, post-death recovery (OBRA-93) and pre-death liens (TEFRA) form the federal estate-recovery framework. States choose among options within those frameworks, but every state must have both a recovery program and a hardship-waiver process.

The Federal Floor: What Medicaid Estate Recovery Was Designed to Be (42 USC § 1396p(b))

Mandatory recovery (the floor)

42 USC § 1396p(b)(1) sets the floor. A state Medicaid program shall seek adjustment or recovery from the estate of:

(A) Permanently institutionalized individuals (any age). A recipient described in (a)(1)(B), i.e., an inpatient in a nursing facility, ICF/IID, or other medical institution who is required to apply income to the cost of care, where the state has determined the individual cannot reasonably be expected to be discharged. This category triggers the TEFRA pre-death lien rights under (a)(1)(B).

(B) Individuals age 55 or older. A recipient who was 55 or older when the recipient received Medicaid, but only for medical assistance consisting of:

• Nursing facility services
• Home- and community-based services (HCBS)
• Related hospital and prescription drug services (when received in the context of NF or HCBS care)

This is the "federal floor", the minimum recovery a state must pursue from the 55+ population.

Carve-out (effective 1/1/2010): "but not including medical assistance for medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title", the QMB / SLMB / QI premium and cost-sharing exclusion. This was added by ACA § 6021.

Long-term care partnership policies are excluded from estate recovery up to the policy's payout amount under (b)(1)(C). Most states participate in the federal Partnership program; consult the ACL Long-Term Care page for current participant counts.

What the floor does NOT include

The federal floor does NOT include:

• Outpatient services unrelated to NF/HCBS (e.g., a doctor's appointment for a non-LTC condition).
• Pharmacy benefits unrelated to NF/HCBS care (e.g., a routine antibiotic prescription).
• Inpatient hospital stays not related to NF/HCBS care.
• Medicaid spending for individuals under 55 who never became permanently institutionalized.
• Medicare cost-sharing benefits for QMB/SLMB/QI dual-eligibles (post-1/1/2010 payment dates).

States that elect only the federal floor, Tennessee, Massachusetts (post-2024 reform), Texas, California (post-SB 833), recover only NF/HCBS/related services from 55+ probate estates.

The Two Permissive Expansions (Services + Estate Definition)

Service-expansion option (b)(1)(B)(ii)

States may elect to recover, from the 55+ population, any items or services under the State plan beyond the federal floor. This means:

• Outpatient primary care visits.
• Pharmacy benefits unrelated to LTC.
• Specialty care, mental health services, dental work.
• Hospital stays unrelated to NF/HCBS care.
• Medicaid managed care capitation paid to MCOs (an over-recovery problem flagged by MACPAC, see below).

An estimated 14-18 states elect the broad service-expansion option, per MACPAC March 2021 (we flag below several states whose categorization is ambiguous across sources, and the precise count varies because some states elect the expansion only for certain service classes).

Estate-definition expansion (b)(4)(B)

States may also elect to expand the definition of "estate" beyond probate property. The expanded definition statutory text:

"Real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement."

This sweeps into the recoverable estate:

• Joint tenancy with rights of survivorship real property.
• Tenancy in common (to the extent of decedent's interest).
• Life estates retained by the decedent (the life-estate value at death).
• Living trusts (revocable, where the grantor retained legal interest).
• TOD Designation Affidavits (Ohio's post-2009 replacement for traditional TOD deeds).
• Payable-on-death (POD) bank accounts.
• TOD-designated brokerage and securities accounts.
• The catchall "other arrangement" language, which courts have interpreted broadly.

Approximately 25-30 states elect expanded estate definition per MACPAC March 2021 (with ambiguity in some classifications; some states use partial expansion reaching only joint property but not trusts). The most aggressive expanded states include Ohio, Iowa, Kansas, Indiana, Wisconsin, New Jersey, Idaho, Nevada, Nebraska, New Hampshire, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia.

What states elect both expansions ("maximum scope")

States that elect BOTH service expansion AND estate-definition expansion are operating at the maximum federally permitted recovery scope. The most aggressive such states include Ohio, Iowa, Kansas, Indiana, Wisconsin, Nebraska, Idaho, Nevada, New Hampshire, New Jersey, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Wyoming.

Compare with states that elect NEITHER expansion (federal floor only, probate estate only): Tennessee, Massachusetts (post-2024 reform), Texas, California (post-SB 833), Mississippi (best-practice example per Justice in Aging).

State-by-State Matrix

Below is our 51-jurisdiction matrix (50 states + DC) as of May 2026. Verify before acting, state policy can change quickly, and several classifications are ambiguous across sources. Where ambiguous, we flag [VERIFY]. Recommend direct lookup of the state's State Plan Section 4.17(b) Amendment at medicaid.gov for canonical confirmation.

Legend:

• Estate Scope: probate-only (federal floor) vs. expanded
• Services: floor (NF/HCBS/related only) vs. all55+ (any Medicaid service for 55+)
• Threshold: minimum claim amount before recovery is pursued
• TEFRA: pre-death lien practice (Active / Occasional / Rare / Inactive)

Key sourcing caveats:

• Connecticut's classification varies across sources. CT adopted ACA-only narrowing for the expansion population; status for non-expansion 55+ is [VERIFY].
• Maryland, Hawaii, Delaware, Vermont, New Mexico, Colorado classifications are described differently across sources. Medicaidlongtermcare.org lists them as probate-only; older Wikipedia/AARP differ.
• Missouri and North Dakota lack federally-required hardship waivers per Justice in Aging Nov 2025, out of compliance with 42 USC § 1396p(b)(3).
• Michigan: nominally probate-only but Long-Term Care Partnership exception triggers expanded recovery for partnership policy holders.
• Nevada has a "Deed Upon Death" statute (NRS 111.655–.699) that is statutorily distinct from a Lady Bird (enhanced life estate) deed.

The Categorical Protections (42 USC § 1396p(b)(2))

Federal law mandates five categorical bars on estate recovery. These apply in every state regardless of the state's election of expanded scope.

Surviving spouse, DEFERRAL not waiver

42 USC § 1396p(b)(2)(A)(i): No recovery while there is a surviving spouse.

The critical point: this is a deferral, not a waiver. After the surviving spouse's death, the state may pursue recovery against:

• Assets that passed from the recipient to the surviving spouse, AND
• Then from the spouse to a third party at the spouse's death.

This is a real exposure. Roughly 10+ states actively pursue post-spouse-death recovery against assets that passed through. Massachusetts is among the most active under the Mason (2023) framework, where the Supreme Judicial Court held that TEFRA living liens expire at death if the property was not sold during the recipient's lifetime, but the post-death recovery against the spouse's eventual estate continues independently.

Surviving child under 21

42 USC § 1396p(b)(2)(A)(ii): No recovery while there is a surviving child under age 21. Once the child turns 21, recovery may proceed against the child's inherited share.

Surviving blind or permanently disabled child of any age

42 USC § 1396p(b)(2)(A)(ii): No recovery during the lifetime of any surviving child who is blind or permanently and totally disabled under the SSI standard at 42 USC § 1382c. There is no end date for this deferral; if the child remains alive and disabled, recovery never proceeds against the deferred share.

Sibling-with-equity-interest (home-only)

42 USC § 1396p(b)(2)(B)(i): No recovery against the home while a sibling who:

• Has an equity interest in the home, AND
• Resided in the home at least 1 year immediately before the recipient's institutionalization,
• Continues to lawfully reside in the home.

Caregiver-child (home-only)

42 USC § 1396p(b)(2)(B)(ii): No recovery against the home while a son or daughter who:

• Resided in the home at least 2 years immediately before the recipient's institutionalization, AND
• Provided care that delayed the recipient's institutionalization,
• Continues to lawfully reside in the home.

Documentation matters

State implementation of these protections is fact-driven and document-heavy. The caregiver-child standard in particular requires:

• Move-in date for the caregiver child (lease, mail records, voter registration, utility bills).
• Level-of-care assessment (typically from the Area Agency on Aging or state assessment tool) showing the recipient required NF-level care during the 2-year period.
• Physician's statement attesting to the recipient's need for NF-level care.
• Care logs, calendar, or other contemporaneous records documenting the care provided.

The 2-year period must be immediately preceding institutionalization, a child who provided care 2018–2020 but moved out in 2022 doesn't meet the rule when the parent enters NF in 2026. And the caregiver child must have provided enough care to actually delay institutionalization; minimal hands-on care for an able-bodied parent doesn't qualify.

The standard rewards families who plan: an adult child planning to be a caregiver should move into the parent's home well before any health crisis, document care contemporaneously, and consult an elder-law attorney about transferring the home into the child's name once the 2-year period is established (using the separate 42 USC § 1396p(c)(2)(A)(iv) lifetime-transfer exception covered below).

The Hardship Waiver Mandate (and the Missouri / North Dakota Compliance Gap)

Federal mandate (b)(3)

42 USC § 1396p(b)(3): "The State agency shall establish procedures, in accordance with standards specified by the Secretary, under which the agency shall waive the application of [recovery] in any case where such application would work an undue hardship as determined on the basis of criteria established by the Secretary."

This is a mandatory federal requirement. Every state must have a hardship-waiver process.

CMS guidance, State Medicaid Manual § 3810

CMS (formerly HCFA) provides three suggested hardship categories in the State Medicaid Manual:

1. Sole income-producing asset, family farm, family business, or other asset that generates the survivor's necessary income.
2. Modest-value homestead, CMS guidance: roughly 50% of the average home value in the county where the homestead is located.
3. Other compelling circumstances, left to state discretion.

The federal floor is thin. States have significant latitude in defining "undue hardship," in setting application timelines, and in approving or denying claims.

Eight commonly-recognized state-level categories

Per Justice in Aging (March 2025), the most progressive state-level hardship frameworks include eight categories:

1. Spouse-care exemption.
2. Adult-child caregiver exemption (extending the (c)(2)(A)(iv) lifetime exception to post-death waiver).
3. Residence-and-financial-hardship combination (Massachusetts model).
4. Homestead of modest value.
5. Sole-income-producing asset.
6. Family income at or below 400% FPL for 2 years.
7. Survivor would become public-assistance-eligible.
8. Other compelling circumstances (kitchen-sink category).

State adoption pattern

Per Justice in Aging's March 2025 state survey (consult that report for the current state-by-state counts):

• A large majority of states recognize an income-producing-asset waiver.
• Most states waive when the estate is the sole income-producing asset.
• A minority of states waive homes of modest value (definitions vary widely).
• Nearly every state uses at least one of the CMS-suggested categories.
• Many states use "other compelling circumstances" as a kitchen-sink category.
• Many states include additional state-defined circumstances.

The Missouri and North Dakota compliance gap

Per Justice in Aging November 2025: Missouri and North Dakota do not offer a federally-required hardship waiver process. They are out of compliance with 42 USC § 1396p(b)(3). State advocates have been encouraged to push for State Plan Amendment compliance, but as of May 2026 neither state has corrected the gap.

This is a significant federal compliance issue that has gone largely unaddressed by CMS, likely reflecting the de-prioritization of estate-recovery oversight in CMS's post-pandemic Medicaid rule-making agenda.

Approval rates

Approval rates vary widely across compliant states, with reported figures in MACPAC's 2019 multi-state survey ranging from low (New York) to very high (Iowa). Illinois is the only state that publishes annual waiver statistics per Justice in Aging; consult the most recent Illinois HFS report for current approval-rate trend lines.

Application rates are extremely low compared with the underlying eligible pool. The chilling effect comes from notice complexity, short application deadlines (often 30 days from claim notice), and lack of legal-aid awareness.

If you need a hardship waiver, engage legal aid as soon as the claim notice arrives. The 30-day clock is short, and DIY filings without legal-aid help often fail on procedural grounds. State legal-aid contacts are listed below.

The Medicare Cost-Sharing Carve-Out (Effective 1/1/2010)

Statutory basis

42 USC § 1396p(b)(1)(B), as amended by ACA § 6021: "but not including medical assistance for medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title". Effective for payment dates on or after January 1, 2010.

What's NOT recoverable (post-1/1/2010 payment dates)

• Qualified Medicare Beneficiary (QMB) premium payments.
• QMB deductibles, coinsurance, copays.
• Specified Low-Income Medicare Beneficiary (SLMB) premiums.
• Qualifying Individual (QI) premiums.
• Medicare Part B premiums paid through Medicare buy-in programs.
• Medicare Part A premiums paid for QMB+ beneficiaries.

What IS still recoverable (subject to age 55+ floor and state scope rules)

• Full-Medicaid services for full-dual-eligibles (including LTSS, NF, HCBS).
• Long-term care Medicaid services even when Medicare-paid items are layered on top.
• Services beyond what Medicare covers (e.g., custodial nursing facility care, which Medicare doesn't cover).

Why the carve-out matters for FIDE-SNP / D-SNP recipients

For full-benefit dual-eligibles enrolled in Fully Integrated Dual Eligible Special Needs Plans (FIDE-SNPs), like Tennessee's BlueCare Plus, Massachusetts's Senior Care Options and One Care, New York's Medicaid Advantage Plus, and Ohio's Next Generation MyCare:

• Medicare-paid services flow through Medicare Advantage payments, not recoverable.
• Medicaid-paid services (LTC, HCBS, wraparound) flow through Medicaid, recoverable per state scope rules.

The practical effect: a large portion of total dual-eligible care expenditure is shielded from recovery by the 2010 carve-out. For the FIDE-SNP population, the recoverable pool is concentrated in the LTSS / HCBS / NF wrap-around, not the full-cost-of-care figure.

Capitation overrecovery problem

Multiple states recover the full Medicaid managed care capitation paid to MCOs, regardless of services actually used by the deceased. If a recipient was enrolled in managed Medicaid LTSS for 18 months but used minimal services, the state recovers the full 18-month capitation, often $10,000+/month, even though the actual service utilization was a fraction of that.

A handful of managed-care states recover only the LTSS portion via actuarial analysis (per Justice in Aging March 2025); most managed-care states recover full capitation.

This is one of MACPAC's 2021 recommendations (Recommendation #2): direct CMS to allow capitation-based recovery to reflect actual services used rather than capitation paid. Not yet implemented.

The Caregiver-Child Lifetime Transfer Exception (42 USC § 1396p(c)(2)(A)(iv))

Distinct from the (b)(2)(B)(ii) post-death home protection, federal law also provides a lifetime transfer exception at 42 USC § 1396p(c)(2)(A)(iv).

The rule

A Medicaid recipient may transfer the home to a son or daughter who:

• Lived in the recipient's home at least 2 years immediately before the recipient's institutionalization, AND
• Provided care that permitted the recipient to reside at home rather than in an institution.

Such a transfer does not trigger the 60-month lookback period (the "transfer for less than fair market value" penalty under (c)(1)).

Why this matters

The caregiver-child lifetime transfer exception is the most powerful federal exception in the Medicaid asset-protection toolkit. Combined with proper documentation, it allows:

• The recipient to retain Medicaid eligibility (no transfer penalty).
• The home to permanently exit the recipient's recoverable estate (transfer completed before death).
• The caregiver child to take title without going through probate (deed records the transfer).
• The home to permanently avoid estate recovery in any state (because the home is no longer in the recipient's estate at death, even in expanded-recovery states).

Documentation required

The same evidentiary standards apply as for the (b)(2)(B)(ii) post-death home protection:

• 2-year residence, immediately preceding institutionalization.
• Care delaying institutionalization, typically requires NF-level-of-care documentation by physician + AAA care assessment.
• Contemporaneous care logs, medical records, and care planning documents.

Practical application

Time the transfer before institutionalization, not after. Once the recipient enters a nursing facility, the (c)(2)(A)(iv) window has closed, the recipient is already institutionalized. Transfers after the recipient has been admitted are subject to the standard 60-month lookback.

A common practice pattern: the parent develops dementia or progressive disability; the adult child moves in to provide care; after 24 months of documented care, the parent's elder-law attorney prepares a quitclaim deed transferring the home to the caregiver child. The transfer is recorded immediately, no transfer penalty applies, and the home permanently exits the estate.

This is the planning success story illustrated in our Ohio Estate Recovery worked example #3 (Marcia in Athens County).

Trust Provisions: How They Intersect with Recovery

Revocable trusts (42 USC § 1396p(d)(3)(A))

Revocable trusts are entirely transparent for Medicaid purposes:

• Corpus treated as available resource for eligibility (so they don't help with the asset-limit problem).
• Recoverable in expanded-estate states (caught by "living trust" language verbatim from (b)(4)(B)).
• Pass outside probate but remain within the recipient's "legal interest at death", caught by expanded scope.

In probate-only states, revocable trusts can avoid recovery (because they avoid probate). In expanded states, they offer zero estate-recovery protection.

Irrevocable trusts (42 USC § 1396p(d)(3)(B))

The mechanics:

• Portion of trust corpus that could be paid to the individual under any circumstances is treated as available.
• Portion that cannot ever be paid to the individual is treated as a transfer for less than fair market value when the trust was funded, triggering 60-month lookback.

The key planning concept: a properly drafted irrevocable trust where no portion can ever be paid back to the grantor removes the corpus from the grantor's countable resources after the lookback runs.

The Medicaid Asset Protection Trust (MAPT)

Within the (d)(3)(B) framework, elder-law practitioners build Medicaid Asset Protection Trusts (MAPTs):

• No retained ability to revoke or amend. Once funded, the grantor cannot pull assets back.
• No retained beneficial interest in principal. Grantor may retain a right to income (without that income being available for LTSS), but no access to principal.
• No general power of appointment. Grantor cannot redirect trust assets to themselves, their estate, or their creditors.

After the 60-month lookback runs, the trust corpus:

• Is not a countable resource for Medicaid eligibility.
• Is not in the recipient's estate at death (no legal title or interest).
• Is therefore not recoverable, even in expanded-estate states.

MAPTs are the gold-standard Ohio and national planning vehicle. Typical drafting cost: $4,000–$10,000. Lookback runway: 60 months from funding.

Special Needs Trusts (d)(4)(A))

For under-65 disabled individuals: SNT corpus is exempt from countable resources for Medicaid eligibility, but the state must be the primary remainder beneficiary up to the amount of medical assistance paid for the individual.

This means at the disabled individual's death, the trust corpus first pays the state for Medicaid services, then any remainder goes to family beneficiaries. This is a recovery mechanism baked directly into the trust statute, independent of the (b) recovery framework.

Miller Trusts / Qualified Income Trusts (d)(4)(B))

For income-cap states (Ohio, Texas, Tennessee, and others): the Miller Trust collects all of the recipient's income above the Special Income Limit ($2,982/month single in 2026). The state must be remainder beneficiary up to medical assistance paid.

The same recovery-via-trust mechanism applies. At death, remaining trust corpus pays the state first.

Pooled Trusts (d)(4)(C))

Managed by nonprofits, with separate accounts for each beneficiary. Same payback structure as (d)(4)(A) and (d)(4)(B). Common in New York for community Medicaid spend-down planning (see our NY MAP guide for context).

The Home-Equity LTSS Exemption and the OBBBA Cap

The pre-OBBBA framework (42 USC § 1396p(f)(1))

Federal law provides a home-equity exemption for LTSS Medicaid eligibility. Under (f)(1)(C), the exemption ranges from a floor to a ceiling, both indexed annually to CPI:

• 2026 floor: $752,000.
• 2026 ceiling: $1,130,000.

States may set their exemption anywhere within the range. Most states use the floor; a small number of states elect the higher ceiling.

States using the higher ceiling in 2025–2026

Per the cited home-equity fact file: California, New York, Hawaii, Massachusetts, New Jersey, and Connecticut elect the maximum. Other states are sometimes reported among the ceiling-electors in secondary sources; verify directly against the current state Medicaid agency rule before relying on the figure in a given state.

The OBBBA cap (Pub. L. 119-21, signed July 4, 2025)

OBBBA (the One Big Beautiful Bill Act) amends 42 USC § 1396p(f)(1) effective 1/1/2028:

• Replaces the indexed range with a flat $1,000,000 cap, frozen, no inflation adjustment, for non-agricultural property.
• Agricultural property remains under prior CPI-indexed rules.

The ceiling-electing states (currently including CA, NY, HI, MA, NJ, CT per the cited home-equity fact file) will be forced down from $1.13M to $1M flat in 2028. Floor states (currently $752,000) will be forced up to $1M flat in 2028, actually a relaxation for those states.

Indirect effect on recovery

OBBBA does NOT directly amend (b) recovery rules. But indirectly:

• More high-equity homes will fall below the eligibility-stage exemption over time as inflation erodes the frozen cap.
• More LTSS Medicaid recipients will have to spend down home equity (via reverse mortgages, home equity loans, or sale and proceeds spend-down).
• The underlying value flows into Medicaid LTSS eligibility, and ultimately at the recipient's death into the recoverable estate (in states with active recovery).
• Result: the recovery universe expands over time even though the recovery rules don't change.

CMS sub-regulatory guidance status

As of May 2026, CMS has not issued sub-regulatory guidance implementing the OBBBA cap. Implementation guidance is expected in late 2026 / early 2027 to give states time to adjust eligibility-stage processes before the 1/1/2028 effective date.

TEFRA Pre-Death Liens: The Lifetime Tool

Authority

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) authorizes states to file pre-death liens against the real property of permanently institutionalized Medicaid recipients. The federal regulatory implementation is at 42 CFR § 433.36.

The basic rule

A state may file a lien against the real property of a Medicaid recipient who is "permanently institutionalized", typically nursing facility, ICF/IID, or psychiatric institution residency where the state has determined the recipient cannot reasonably be expected to be discharged.

The lien encumbers the property during the recipient's life, preventing sale or refinancing without satisfying the Medicaid claim.

Mandatory bars on filing

The lien CANNOT be filed when any protected resident lawfully resides in the home:

• Surviving spouse.
• Child under 21, or blind/disabled child of any age.
• Sibling-with-equity-interest who lived in home 1+ year before institutionalization.
• Caregiver child who lived in home 2+ years before institutionalization and provided care delaying institutionalization.

Lien dissolution

The lien dissolves automatically if the recipient discharges from institutional care and returns home. This is a meaningful protection, TEFRA liens don't survive a return-to-community.

Due-process requirements

The recipient is entitled to fair-hearing rights before the lien is filed (constitutional due-process requirement under 14th Amendment).

State practice variation

States vary widely in TEFRA lien practice:

• Very active: New York. NY uses TEFRA liens routinely to encumber the home during the recipient's lifetime, ensuring that if the recipient dies in institutional care without returning home, the state can recover from sale proceeds.
• Active: Georgia, Iowa, Idaho, Kansas, Nebraska, Nevada, New Hampshire, North Dakota, Rhode Island, South Dakota, Tennessee (rare in practice), Wisconsin.
• Occasional: Most expanded-recovery states.
• Inactive: California (post-SB 833), Massachusetts (post-Mason 2023), Tennessee (probate-only and inactive in practice), Texas.

The Mason (2023) Massachusetts decision

In re Estate of Mason, 493 Mass. 148 (Dec. 13, 2023): Massachusetts Supreme Judicial Court held that TEFRA living liens expire at death if the property was not sold during the member's lifetime. Other states are watching this ruling but have not yet imported it. The decision substantially weakens MassHealth's TEFRA practice and is one of several factors that contributed to the 2024 MA reform (Chapter 197 of Acts of 2024).

If you receive a TEFRA lien notice, engage legal aid or an elder-law attorney immediately. Hardship waivers, factual challenges to permanent-institutionalization status, and protected-resident analyses can sometimes defeat lien filings.

The Federal Share Problem: Why States Don't Earn What They Recover

States must return the federal Medicaid match (FMAP) of recovered funds to the federal government. States keep only the state share. The federal match rate varies by state from 50% to 75%+, depending on per-capita income.

At an FMAP of 65%, a state collects 35¢ on every recovered dollar. At an FMAP of 75% (the highest-match states like Mississippi and West Virginia), a state collects 25¢ on every recovered dollar.

This is why estate recovery is rarely a meaningful state revenue source even at top-state collection levels. Ohio's $94 million FY 2024 collection represents roughly $33 million in actual state revenue, a tiny fraction of the state's $35+ billion Medicaid spending. New York's recoveries on a similar order of magnitude represent perhaps $10–15 million in net state revenue against a $90+ billion Medicaid program.

The implication for the policy debate: states have little fiscal incentive to defend estate recovery aggressively. The political cost of pursuing modestly-affluent grieving families substantially exceeds the modest state-share fiscal gain. This is why state-level reforms (MA 2024, CA 2017, OH HB 318 pending) often pass with bipartisan support, the fiscal hit to the state is small, while the political win is substantial.

Medicaid Estate Recovery Dollar Volumes

National totals

• FY 2019 (most-cited national figure): $733 million in total estate recoveries (MACPAC March 2021 Report to Congress).
• As percentage of LTSS spending: 0.55% of total fee-for-service Medicaid LTSS spending in FY 2019, per MACPAC.
• Recovery rates by state: vary from under 0.10% (e.g., Texas, Louisiana) to over 1.5% (e.g., Iowa, Idaho, Minnesota) per MACPAC.
• Historical trend: published ASPE / KFF baselines show slow growth in nominal recovery dollars over the past two decades; consult the latest ASPE and KFF issue briefs for the specific year-by-year series.

Top recovering states by absolute dollars

The historically top-collecting states by absolute recovery dollars include:

1. Massachusetts (now significantly narrowed by Chapter 197 of Acts of 2024, post-2024 figures expected to fall sharply).
2. New York.
3. Pennsylvania.
4. Ohio (~$94M FY 2024 per Ohio AG records; HB 318 pending).
5. Wisconsin.

These few states together account for a substantial share of national collections (consult the latest MACPAC and KFF state-by-state series for the precise share).

Average recovery per estate

Average per-estate recoveries vary widely across states, with the lowest-average states recovering only a few thousand dollars per estate and states with concentrated, high-value recoveries reporting averages an order of magnitude higher. Consult the MACPAC March 2021 Chapter 3 appendix for the state-by-state average-per-estate series.

States that recover essentially nothing

Per ASPE FY 2004 data (informational baseline; current figures may differ): Alaska, Georgia, Michigan, Texas, Louisiana, New Mexico, Utah reported minimal or zero collections. Texas notably continues to collect very little despite its size, reflecting probate-only scope and $10K threshold.

State Plan Section 4.17(b) reporting

Each state's State Plan Section 4.17(b) specifies (i) which services are subject to recovery, (ii) state's undue hardship definition, and (iii) cost-effectiveness methodology. CMS-approved State Plan Amendments are publicly available at medicaid.gov/medicaid/medicaid-state-plan-amendments. This is the canonical primary source for state-by-state verification.

The Predatory Critique: Academic and Advocacy Literature

Key 2026 academic study

Spishak-Thomas, Sandoe, Howard (2026), "Lots of Pain for Little Gain: Three Decades of Medicaid Estate Recovery," 51 J. Health Pol. Pol'y & L. 101 (Duke University Press). Authors at Rutgers / Princeton.

Key findings:

• Confirms the 0.55% LTSS-spending recovery floor.
• Estate recovery implementation associated with statistically significant decrease in home equity in overall sample, in Black and White subgroups, and in those over 74.
• Estate recovery implementation associated with decrease in Medicaid enrollment among unmarried, low-income individuals 65+, the chilling-effect finding. Some elders forgo Medicaid LTSS rather than expose their family home to recovery.

This is the most rigorous empirical study of estate recovery in three decades. It validates the longstanding advocacy claim that recovery is "lots of pain for little gain", small fiscal recovery against large family hardship and disincentive to enroll.

MACPAC March 2021, the foundational federal analysis

MACPAC March 2021 Report to Congress, Chapter 3, "Medicaid Estate Recovery: Improving Policy and Promoting Equity".

Three central recommendations:

1. Make recovery optional, repeal the federal mandate at 42 USC § 1396p(b).
2. Allow capitation-based recovery to reflect actual services used, addressing the over-recovery of managed-care capitation.
3. HHS-set minimum hardship standards, addressing the wide variance and the MO/ND compliance gap.

None of the three recommendations have been adopted via federal rule-making or statute. They remain the most-cited policy frame.

Justice in Aging "Mitigating the Harmful Effects" (March 2025)

State-level guidance. Urges states to:

1. Narrow scope to federal floor (Mississippi exemplary as expanded-state-with-floor-services).
2. Enhance hardship waivers (eight categories).
3. Set cost-effectiveness thresholds (NC $50K, IL/GA $25K).
4. Increase transparency (only IL publishes waiver statistics).

NCLC "What States Can Do" (May 2025)

Practical state-level guidance modeled on Justice in Aging framework. Identifies opportunity areas in expanded-recovery states.

SHVS "Making Medicaid Estate Recovery Policies More Equitable" (April 2022)

State Health & Value Strategies toolkit (Robert Wood Johnson Foundation). Explicit equity framing. Used by state Medicaid directors as an internal-policy template.

Consumer-facing harm narratives

• Bob Weldon's brother Phil (Ohio): died of cancer at 63; estate billed $3,570 for 2 months of Medicaid coverage.
• Teresa Head-Gordon (Ohio): $195,000 recovery on mother's estate; mother had only $12,000/year SSA. Called program "predatory."
• Bradley Plaisted (Ohio): $67,000 lien on home after wife's cancer death.
• Iowa families (KFF Health News 2024): $4 million bills against estates of two Iowans with disabilities.
• New York: among the lowest hardship-approval rates in MACPAC's multi-state survey.

These are the cases that drove Pro Seniors' multi-year reform campaign in Ohio, MA's Chapter 197 reform, and the federal Schakowsky bill.

Race and Ethnicity Disparities

Quantitative evidence

• People of color make up a majority of Medicaid enrollees under 65 and a significant share of dual eligibles per MACPAC; consult MACPAC's March 2021 Report Chapter 3 for the current demographic breakdown.
• Spishak-Thomas et al. (2026): Recovery implementation correlated with statistically significant home-equity decline in Black subgroup.
• Estate recovery implementation associated with decreased Medicaid enrollment among unmarried, low-income 65+ individuals, chilling effect concentrated in communities of color.

Theoretical / qualitative literature

• Lower MAPT planning rates in communities of color, driven by lower elder-law access, less generational wealth, fewer family attorney relationships.
• Multigenerational households (especially Asian American and Latino), caregiver-child exception under-applied because of documentation barriers (less formal residence records, voter registration mismatches).
• Black families' homeownership = primary wealth asset; recovery erases the single largest intergenerational transfer.
• Native American families: 25 USC § 1601+ protections only partially enforced; tribal trust property generally protected, but personal property and non-tribal real estate exposed.

Major source documents

• MACPAC March 2021 Chapter 3 ("Improving Policy and Promoting Equity").
• SHVS State Toolkit (April 2022, RWJF), explicit equity framing.
• Justice in Aging "Mitigating the Harmful Effects" (March 2025).
• AARP LTSS State Scorecard, embeds estate-recovery equity discussion.
• Milbank Quarterly: "The Association of Medicaid Estate Recovery with Homeownership, Home Equity, and Medicaid Enrollment."

The race-and-ethnicity literature on estate recovery is one of the strongest current academic critiques. The argument: estate recovery is structurally regressive, falling hardest on families with one paid-off home and modest savings, a profile disproportionately representing Black, Latino, and Native American Medicaid LTSS recipients. Wealthy white families fund MAPTs five years before need; lower-middle-class families of color don't.

Tribal Property Protections (25 USC §§ 1601–1683)

Federal authority

• 25 USC §§ 1601–1683 (Indian Health Care Improvement Act): defines "Indian" for protection purposes.
• 25 USC § 1631: general federal trust property protection.
• HCFA SMM § 3810: specifically excludes tribal trust resources from estate recovery.
• Native American Graves Protection and Repatriation Act (NAGPRA): protects ceremonial / cultural items.
• 42 CFR § 433.36: tracks tribal protections in regulatory text.

Protected categories

1. Interests in / income from tribal land held in trust by the federal government.
2. Judgment funds from Indian Claims Commission and US Claims Court.
3. Real property and improvements on a reservation or within historical reservation boundaries (when passing among Indians under IHCIA definition).
4. Items of unique religious / spiritual / traditional / cultural significance.
5. Rights supporting subsistence or traditional lifestyle under tribal law / custom.
6. Government reparation payments.

State implementations

States with significant tribal populations vary in protection robustness:

• AZ, NM: Strong Indian Health Service integration; recovery typically not pursued against tribal trust assets.
• OK: Cherokee, Chickasaw, Choctaw nations have significant influence on state practice.
• MN, MT, ND, SD: Specific exemptions in state Medicaid regulations.
• AK: Alaska Native trust resources (BIA-protected) excluded; this is partly why AK has the highest average recovery per estate (recovery focuses on non-Native population).

The Native American protection framework is one of the strongest carve-outs in federal estate recovery law. It reflects 19th- and 20th-century treaty obligations and the federal trust responsibility doctrine, protections that long predate Medicaid.

The Five-State Cluster: OH / TN / MA / NY / CA in Detail

We have written deep state-specific guides for Ohio, Tennessee, Massachusetts, New York, and California. The five represent the full range of state choice within the federal framework.

Ohio: Maximum Expansion ($94M / Year)

Ohio elects every permissive expansion. Recoverable estate includes joint tenancy, life estates, living trusts, TOD Designation Affidavits, POD accounts, and "other arrangements." Recovery against all Medicaid services for 55+ (not just NF/HCBS/related). FY 2024 collection: ~$94 million. Top-5 recovery state.

Authority: ORC §§ 5162.21, 5162.211, 2117.061; OAC 5160:1-2-07. Last substantive amendment HB 59 of 130th GA (2013). Pending reform: HB 318 (136th GA) would auto-waive recovery <$10K, cap home liens at 75% of assessed value for homes ≤$150K, and revert to federal-floor probate-only.

For full detail: Ohio Estate Recovery guide.

Tennessee: Federal Floor with $25K Threshold

Tennessee elects the federal floor only, recovery against NF/HCBS/related services for 55+ probate estates only. $25,000 minimum threshold under T.C.A. § 71-5-116. CommonHealth and PCA-style services exempt. Inactive in TEFRA pre-death lien practice. Recovery in low single-digit millions annually.

Authority: T.C.A. § 71-5-116; SPA TN-24-0002 (effective 4/1/2024); State Plan Attachment 4.17-A.

The TN look-back rule for transfers BEFORE Medicaid LTSS eligibility is a separate analysis (42 USC § 1396p(c) vs. § 1396p(b)). The TN penalty divisor for 2026 is set by the current TennCare cost-neutrality memo; pull the current memo from the Bureau of TennCare for the finalized daily-divisor figure. Tennessee does NOT recognize Lady Bird (enhanced life estate) deeds, and TN's TOD deed for real property is uncertain pending SB984/HB1793 in the 2025-2026 session, both common probate-avoidance techniques families use to plan around recovery require verification before relying on them in TN.

For full detail, including the 5-year lookback and penalty divisor: Tennessee Medicaid pillar.

Massachusetts: Post-2024 Reform, Federal Floor

Massachusetts narrowed scope from expanded to federal floor for the estates of members who died on or after 8/1/2024 under Chapter 197 of the Acts of 2024 (M.G.L. c. 118E § 31; signed 9/6/2024, effective 12/5/2024, applied retroactively to deaths on/after 8/1/2024). CommonHealth and PCA exempt (CMS approval pending). $25,000 auto-waiver continues. Pre-2024 was an expanded-recovery state and one of the top-5 collectors. Implementation: EOM 25-09 (effective 5/27/2025).

Key MA case law: In re Estate of Mason, 493 Mass. 148 (2023), TEFRA living liens expire at death if property not sold during recipient's lifetime. In re Estate of Kendall, 486 Mass. 522 (2020), 3-year MUPC statute of repose under M.G.L. c. 190B § 3-108. Daley/Nadeau, 477 Mass. 188 (2017), irrevocable income-only trust principal not countable as available resource.

Pre-reform recovery was substantial (top-5 state); post-reform expected to fall sharply.

For full detail: Massachusetts Medicaid pillar and SCO/One Care guide.

New York: Probate-Only with Aggressive TEFRA Practice

New York limits recovery to probate estates only (2014 narrowing) but pursues very active pre-death TEFRA lien practice. Recovery against all Medicaid services for 55+ (not just NF/HCBS/related). MACPAC's multi-state survey ranks NY's hardship-waiver approval rate near the bottom.

Authority: SOS-Office of Medicaid Inspector General Estate Recovery; various NY State implementations.

For full detail: New York Medicaid pillar and MAP FIDE-SNP guide.

California: Eliminated Expanded Recovery (2017)

California narrowed Medi-Cal recovery to probate estate only via SB 833 (2017). Recovery limited to federal floor for 55+. Modest-homestead hardship waiver. Surviving-spouse-and-RDP claims prohibited. Inactive in TEFRA pre-death lien practice.

For full detail: California Medicaid pillar and Medi-Medi Plans guide.

The Other 45 States: Quick Tour

For families navigating Medicaid in states beyond the five-state cluster, the most important questions are:

1. Is your state probate-only or expanded?
2. Does your state recover only NF/HCBS/related, or all services for 55+?
3. Is there a minimum-claim threshold?
4. What's the hardship-waiver framework?

Refer to the matrix above. A few high-yield notes:

• Iowa, Kansas, Indiana, Wisconsin, Nebraska, New Hampshire, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Wyoming: Maximum-scope expanded states. TOD/POD/JTWROS trapped. MAPTs essential.
• Texas, Florida, Vermont, West Virginia, Michigan: Lady Bird deed states (5 only). Family-friendly probate-bypass tool not available elsewhere.
• Mississippi: Best-practice expanded-recovery state per Justice in Aging, uses expanded-estate authority but limits services to federal floor. Models how to balance federal compliance with family protection.
• Pennsylvania: Top-5 collector by absolute dollars but has "most generous" hardship policy per advocates.
• Illinois: Only state that publishes annual hardship-waiver statistics.
• Missouri, North Dakota: Out of compliance with federal hardship-waiver mandate per Justice in Aging Nov 2025.

For each state, the canonical primary source is the state's State Plan Section 4.17(b) Amendment at medicaid.gov/medicaid/medicaid-state-plan-amendments. Verify before acting.

Planning Tools That Work Everywhere

Medicaid Asset Protection Trust (MAPT)

Properly drafted irrevocable trust under 42 USC § 1396p(d)(3)(B). Funded 5+ years before Medicaid application. No retained ability to revoke or amend; no retained beneficial interest in principal; no general power of appointment. After 60-month lookback runs, corpus is out of countable resources for eligibility AND out of recoverable estate (no legal title or interest at death).

Works in every state. Typical drafting cost $4,000–$10,000.

Outright lifetime gift, 5+ years pre-application

Removes asset from estate; lookback satisfied. Works in every state.

Caregiver-child home transfer (lifetime, under (c)(2)(A)(iv))

Federal exception. 2-year residence + care-delaying-institutionalization standard. Transfer doesn't trigger 60-month lookback. Removes home from estate permanently. Works in every state.

Medicaid-compliant Single Premium Immediate Annuity (SPIA)

Irrevocable, non-assignable, actuarially sound, equal monthly payments, state named as primary remainder beneficiary. Converts countable resource to income stream. State remainder beneficiary up to medical assistance paid satisfies recovery from remaining stream. Works in every state.

Spend-down on exempt assets

Home maintenance / improvements; prepaid funeral (irrevocable burial contract); vehicle. Works in every state.

Categorical protections (b)(2), surviving spouse, child, sibling, caregiver-child

Mandatory federal protections. Apply in every state. Documentation matters.

Planning Tools That Work Only in Probate-Only States

TOD / POD / JTWROS designations

Probate-bypass mechanism. Works in probate-only states (CA, MA post-2024, NY, TN, TX, MN, MI, NC, IL, MO, OK, MD, AK). Does NOT work in expanded-estate states (OH, IA, KS, IN, WI, NE, NJ, PA, etc.), caught by (b)(4)(B) "joint tenancy / living trust / other arrangement" language.

Revocable living trust

Probate-bypass. Works in probate-only states. Caught by "living trust" language verbatim from (b)(4)(B) in expanded states. Provides zero recovery protection in expanded states.

Traditional life estate deed

The life estate itself dies with the recipient; remainder may be safe if created with consideration outside lookback. In expanded states, the life-estate value at death is recoverable. Works imperfectly in expanded states; works cleanly in probate-only states.

Lady Bird Deeds: The Five-State Tool

A Lady Bird (enhanced life estate) deed is a special form of life estate deed where the life tenant retains:

• The right to revoke the deed during life.
• The right to encumber the property during life.
• The right to sell the property during life and direct the proceeds.
• The remainder interest passes automatically at death.

The combination of retained powers means the transfer is incomplete during life (no transfer-penalty consequence at creation), but title passes seamlessly at death (no probate, and arguably outside the recipient's estate even in expanded-recovery states because the recipient retained no surviving "legal interest" in the property at the moment of death).

The five states recognizing Lady Bird deeds

1. Florida.
2. Michigan.
3. Texas.
4. Vermont.
5. West Virginia.

Not Lady Bird states despite confusion

• Nevada: Has a separate "Deed Upon Death" statute under NRS 111.655–.699 that achieves a similar non-probate transfer but is statutorily distinct from a Lady Bird deed.
• South Carolina: Introduced HB 4264 in March 2025 to add Lady Bird recognition. Not enacted as of May 2026.
• All other states: Do not recognize Lady Bird deeds.

Practical use

In the five Lady Bird states, the deed is a powerful estate-recovery-avoidance tool, particularly for modest-asset families who can't afford MAPT drafting. Funded with the home, it provides substantial recovery protection without the 60-month lookback delay.

In the other 45 states, don't try to import Lady Bird strategies. The closest functional substitute in Ohio is the TOD Designation Affidavit, which (as detailed in our Ohio Estate Recovery guide) doesn't shield from recovery in expanded states.

Spousal Refusal: NY-Plus

Spousal refusal is a planning strategy where the community spouse formally refuses to support the institutionalized spouse, forcing Medicaid to evaluate the institutionalized spouse based solely on the institutionalized spouse's own income and assets. The legal mechanism: the federal "name on the check" rule, Medicaid cannot count one spouse's income against the other once the institutionalized spouse is eligible for institutional Medicaid.

Where it works

Courts have upheld spousal refusal in:

• New York (most active practitioner volume; embedded in NY elder-law practice).
• Florida (historically pursues recovery less aggressively, so less common in practice).
• Connecticut (federal court 2005; recognition exists but is rarely used).
• Ohio (recognition exists, rarely used in practice; not formally institutionalized).
• Rhode Island (recognition exists, rarely used).

Where it doesn't work

In the remaining 45 states, spousal refusal has not been recognized via case law. Don't try to import NY spousal-refusal planning to Texas, Michigan, Pennsylvania, or California without an in-state elder-law attorney's specific guidance.

The mechanics in NY

The community spouse signs a letter formally refusing to support the institutionalized spouse. The state files a separate civil action against the community spouse to recover support, but the institutionalized spouse becomes Medicaid-eligible immediately. The civil action against the community spouse is typically settled for less than the full Medicaid spend, often via Medicaid-compliant annuity or other tools. Net result: the institutionalized spouse gets Medicaid LTSS, the community spouse keeps most assets.

This is a NY specialty. If you're not in NY (or one of the four other recognizing states), the CSRA / MMMNA / CSMIA spousal-impoverishment framework (federal, applies in every state) is the alternative.

Reform Watch 2025–2026

Federal: H.R. 6951, Stop Unfair Medicaid Recoveries Act

• Sponsor: Rep. Jan Schakowsky (D-IL-9).
• Reintroduced: January 6, 2026 (119th Congress). Predecessors: H.R. 6698 (117th Cong.); H.R. 7573 (118th Cong.).
• Status: Referred to House Energy & Commerce; no markup as of late April 2026.
• What it does: Repeals the federal mandate that states establish Medicaid Estate Recovery Programs and limits TEFRA pre-death liens.
• Original cosponsors (19, all Democrats): Barragán, Castor, Cherfilus-McCormick, Cohen, Doggett, Garcia (TX), Goldman, Norton, Kelly, Matsui, Ocasio-Cortez, Omar, Pingree, Quigley, Ramirez, Strickland, Tonko, Trahan, Wasserman Schultz. Later additions (March–April 2026): Pocan, Simon, Tlaib.
• Senate companion: None as of May 2026.
• Endorsements: Justice in Aging, NHeLP, NAELA, Consumer Voice, Brain Injury Association of America, AARP, MLRI, Margolis Bloom & D'Agostino, Medicare Rights Center.
• Republican counter-proposal (118th Cong.): H.R. 8094, narrower, prohibits recovery only when home transfers to Medicaid-eligible person or someone <138% FPL. Did not advance.

Federal: OBBBA Implementation

OBBBA / Pub. L. 119-21 home-equity cap: $1M flat effective 1/1/2028. CMS sub-regulatory guidance pending. Expected late 2026 / early 2027. Indirect impact on recovery universe.

State: Massachusetts (Enacted 2024)

Chapter 197 of Acts of 2024. Applies to deaths on/after 8/1/2024 (signed 9/6/2024, effective 12/5/2024). Federal floor scope; CommonHealth/PCA exempt (CMS approval pending). Implementation: EOM 25-09 (effective 5/27/2025). Major narrowing, MA was top-5 collector pre-reform.

State: California (Enacted 2017)

SB 833. Probate-only; federal floor; modest-homestead hardship; surviving-spouse-and-RDP claims prohibited.

State: Ohio (Pending)

HB 318 (136th GA, Stephens/Brennan bipartisan). Three reforms: auto-waive recovery <$10K; 75% home-equity lien cap on properties ≤$150K; revert to federal-floor probate-only. Substitute amendment adopted October 2025; further legislative action unclear as of May 2026.

State: New York (Pending)

S.5408 family of bills proposing to end recovery against modest estates. Status unclear as of May 2026, recommend direct lookup before publication.

State: South Carolina (Pending)

HB 4264 (March 2025), would recognize Lady Bird deeds. Not enacted.

State: North Carolina (2023)

SPA 23-0001 updated estate recovery thresholds and undue hardship criteria (effective Jan 2023). $50,000 minimum threshold.

The MACPAC Recommendations Still Pending

MACPAC's 2021 recommendations remain the most authoritative federal policy frame for estate recovery reform. None has been adopted via federal rule-making or statute.

1. Make recovery optional: Repeal the federal mandate at 42 USC § 1396p(b). Would let states choose whether to pursue recovery at all. The Schakowsky bill's policy substance.

2. Allow capitation-based recovery to reflect actual services used: Rather than recovering full managed-care capitation regardless of utilization, allow states to recover only the actuarial equivalent of services actually used. Addresses the over-recovery problem in 25+ managed-care states.

3. HHS-set minimum hardship standards: Direct CMS to promulgate minimum hardship-waiver standards. Would address the wide variance and the MO/ND compliance gap.

These recommendations have been re-endorsed by Justice in Aging, NCLC, AARP, NHeLP, MLRI, and Consumer Voice in publications throughout 2024–2026. They are the policy floor for any future federal reform short of full repeal.

What This Means for Families

If you are an aging parent or adult child caring for one, here's the practical decision tree:

Step 1: Identify your state's recovery scope

Use the matrix above. Confirm via direct lookup of your state's State Plan Section 4.17(b) Amendment at medicaid.gov.

• Probate-only state: TOD/POD/JTWROS work; revocable trusts work; planning is simpler.
• Expanded state: TOD/POD/JTWROS DON'T work; revocable trusts DON'T work; you need MAPT or caregiver-child planning.

Step 2: Assess Medicaid LTSS likelihood

If LTSS is plausibly more than 5 years away, a MAPT is the gold-standard tool. Engage an experienced elder-law attorney; expect $4,000–$10,000 in drafting fees; fund the home and significant assets into the trust; let the 60-month lookback run.

If LTSS is imminent (within months), a MAPT is too late. Focus on:

• Spend-down on exempt assets (home maintenance, prepaid funeral, vehicle).
• Medicaid-compliant SPIA for spousal protection.
• Caregiver-child analysis if an adult child has been in the home 2+ years.

Step 3: Document caregiver-child arrangements aggressively

If an adult child has been providing care:

• Establish the 2-year residence with mail records, voter registration, utility bills.
• Get a level-of-care assessment from the AAA or state assessment tool.
• Get a physician's statement attesting to NF-level care need.
• Keep contemporaneous care logs.
• Consider transferring the home to the caregiver child during life under (c)(2)(A)(iv), exempt from lookback.

Step 4: Plan around the surviving spouse

If the recipient is married, the surviving spouse provides categorical deferral but not waiver. Plan for the surviving spouse's eventual death:

• Surviving spouse can fund their own MAPT after the recipient's death; 5-year lookback runs from funding.
• Outright gifts by the surviving spouse 5+ years before their death remove assets from eventual recovery.

Step 5: Engage legal aid early if recovery notice arrives

If a recovery claim notice (e.g., Ohio's ODM 07400 / 07408) arrives:

• 30-day clock typically applies for hardship-waiver requests.
• DIY filings frequently fail on procedural grounds.
• Engage state legal aid, NAELA-affiliated elder-law attorneys, or Pro Seniors / Justice in Aging-network organizations immediately.

Where to Get Help

Federal advocacy organizations

• Justice in Aging, leading federal advocacy organization on Medicaid estate recovery. Web: justiceinaging.org.
• National Health Law Program (NHeLP), federal Medicaid policy. Web: healthlaw.org.
• National Academy of Elder Law Attorneys (NAELA), referral source for board-certified elder-law specialists. Web: naela.org.
• National Consumer Law Center (NCLC), practical state-level estate recovery guidance. Web: nclc.org.
• AARP, federal advocacy on home-equity LTSS and recovery reform. Web: aarp.org.
• Consumer Voice (National Consumer Voice for Quality Long-Term Care), nursing-home and LTSS advocacy. Web: theconsumervoice.org.
• Medicare Rights Center, Medicare-Medicaid intersection. Web: medicarerights.org.

State legal-aid organizations (selected)

• Pro Seniors Inc. (Ohio), Cincinnati-based, lead organization on Ohio HB 318 reform. Phone: 513-345-4160 / 800-488-6070.
• Massachusetts Law Reform Institute (MLRI), MA estate recovery reform leadership.
• Margolis Bloom & D'Agostino, leading MA elder-law practice; estate recovery reform advocacy.
• AARP State Offices, most states have an AARP state office that can refer to local resources.
• NAELA State Chapters, most states have a chapter; referral source for in-state elder-law specialists.

Federal-level help

• CMS Medicaid Estate Recovery hub: medicaid.gov/medicaid/eligibility-policy/estate-recovery.
• Medicare Helpline (for SHIP referrals to state-level counseling): 800-MEDICARE / 800-633-4227.

Brevy state pillars

• Ohio: Estate Recovery deep guide | Eligibility & Income Limits | Ohio Medicaid pillar.
• Tennessee: TN Medicaid pillar | BlueCare Plus FIDE-SNP.
• Massachusetts: MA Medicaid pillar | SCO/One Care.
• New York: NY Medicaid pillar | MAP FIDE-SNP.
• California: CA Medi-Cal pillar | Medi-Medi Plans.

Learn More

• Ohio Estate Recovery: the deepest state-specific deep dive in our catalog, covering Ohio's maximum-scope expanded recovery and the pending HB 318 reform.
• California Medi-Cal Estate Recovery: how SB 833 (2017) narrowed recovery to the federal floor and probate-only estates.
• Medicaid Planning Strategies: MAPTs, the caregiver-child transfer exception, and the lookback rules that determine what survives recovery.
• Massachusetts Medicaid: post-2024 reform context after Chapter 197 of the Acts of 2024 narrowed scope to the federal floor.
• New York Medicaid: probate-only recovery paired with aggressive pre-death TEFRA lien practice.
• Tennessee Medicaid: a federal-floor state with a $25,000 minimum-claim threshold.

Find personalized help understanding Medicaid estate recovery and protecting your family's home at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.