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 (Ohio Revised Code 5162.21).1 Tennessee sticks to the federal floor and waives recovery against smaller estates under a minimum-claim threshold (T.C.A. 71-5-116). Massachusetts narrowed its scope from expanded recovery to the federal floor in 2024 (Chapter 197 of the Acts of 2024); New York is probate-only but pursues aggressive pre-death liens under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA); California eliminated expanded recovery in 2017 (SB 833). Total recoveries are small relative to the program: federal advisory analysis has found national estate recoveries amount to roughly half a percent of total fee-for-service Medicaid long-term services and supports (LTSS) spending.

That ratio, a small fraction of LTSS spending, 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 (MAPTs) five years before need. Justice in Aging, the National Consumer Law Center (NCLC), AARP, the National Academy of Elder Law Attorneys (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. As of spring 2026 it had picked up a few dozen cosponsors 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
• How Estate Recovery Differs Across States
• Find Your State's Estate Recovery Guide
• 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
• 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
• Frequently Asked Questions
• Where to Get Help
• Learn More

60-Second Version

• Federal mandate: Under 42 USC § 1396p(b) (added by OBRA-93, 1993), every state Medicaid program must seek recovery from the estate of (1) any permanently institutionalized recipient and (2) any recipient age 55 or older who received Medicaid services. The mandatory floor for the 55+ population covers nursing-facility services, home- and community-based services (HCBS), and related hospital and prescription drug services.
• Two permissive expansions: (a) services beyond the floor (any Medicaid service for 55+ recipients), and (b) the estate definition beyond probate property (joint tenancy, life estates, living trusts, TOD/POD, "other arrangements"). An estimated 14-18 states elect the broad services version; roughly 25-30 states elect expanded estate definition (MACPAC March 2021).
• Categorical protections (mandatory under (b)(2)): recovery may be made only after the death of a surviving spouse (a deferral, not a waiver), and only when there is no surviving child under 21 and no blind or permanently and totally disabled child of any age (under the Supplemental Security Income (SSI) standard at 42 USC § 1382c). Two further bars at (b)(2)(B), for a resident sibling who lived in the home at least 1 year before institutionalization and a resident caregiver child who lived there at least 2 years and provided care that delayed institutionalization, are written by the statute to apply "in the case of a lien on an individual's home under subsection (a)(1)(B)", not to every post-death recovery. Many states apply them more broadly as a matter of state policy; confirm your own state's treatment.
• Hardship waivers (mandatory under (b)(3)): every state must establish procedures to waive recovery in cases of undue hardship. Advocacy reporting (Justice in Aging) has identified a small number of states that lack an operational waiver process and are out of compliance, and notes that approval rates vary widely across compliant states.
• Medicare cost-sharing carve-out (42 USC § 1396p(b)(1)(B)(ii)): Medicaid payments for Medicare cost-sharing on behalf of Medicare Savings Programs enrollees, including Qualified Medicare Beneficiary (QMB) premiums, deductibles, and copays, are NOT recoverable. This shields the Medicare-cost-sharing slice of a dual eligible's care, not the Medicaid LTSS slice, which stays recoverable under the federal floor. It matters most for recipients in Fully Integrated Dual Eligible Special Needs Plans (FIDE-SNPs) such as Tennessee BlueCare Plus, New York Medicaid Advantage Plus, Massachusetts Senior Care Options and One Care, and Ohio Next Generation MyCare.
• Caregiver-child transfer exception (42 USC § 1396p(c)(2)(A)(iv)): a separate federal exception that allows lifetime transfer of the home to an adult child who lived in the home at least 2 years immediately before institutionalization and provided care that delayed it, without triggering the look-back transfer penalty. Works in every state.
• Trust provisions (42 USC § 1396p(d)): revocable trusts are countable and recoverable; properly drafted irrevocable Medicaid Asset Protection Trusts (MAPTs) sit outside the expanded estate once the look-back runs. The federal look-back is 60 months. California is the exception: effective January 1, 2026, Medi-Cal applies a 30-month look-back for nursing-facility care and counts only transfers made on or after January 1, 2026.2
• Home-equity LTSS exemption (42 USC § 1396p(f)(1)): in 2026 the home-equity limit for LTSS eligibility runs from a federal floor of $752,000 to a state-discretion ceiling of $1,130,000 (CPI-indexed).2 The One Big Beautiful Bill Act (OBBBA, Pub. L. 119-21, signed July 4, 2025) caps the non-agricultural limit at $1,000,000 flat (no inflation adjustment) effective 1/1/2028, indirectly expanding the recovery universe over time.
• Recovery dollar volume: total estate recoveries are a small share of Medicaid spending, roughly half a percent of total fee-for-service Medicaid LTSS spending per federal advisory analysis, the central data point for the "predatory but small" policy critique.
• Top collecting states: Massachusetts (now narrowed by 2024 reform), New York, Pennsylvania, Ohio, and Wisconsin have historically led in absolute recovery dollars.
• Federal share clawback: states must return the federal Medicaid match (FMAP) on recovered funds to CMS, keeping only the state share, so each recovered dollar yields the state only a fraction in net revenue, a reason recovery is rarely a meaningful state revenue source.
• Reform 2025–2026: H.R. 6951 (Schakowsky, Stop Unfair Medicaid Recoveries Act), pending in House Energy & Commerce, would repeal the federal mandate. State-level reforms have been enacted in Massachusetts (Chapter 197 of 2024) and California (SB 833 of 2017); reforms are pending in Ohio (HB 318), New York (S.5408 family), and South Carolina (HB 4264, Lady Bird deed recognition).

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. Every state must operate a Medicaid Estate Recovery Program (MERP) that recovers from the estate of an enrollee who was 55 or older when they received nursing-facility, HCBS, and related hospital and prescription-drug services.2

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. As the statute now reads, Medicaid payments for Medicare cost-sharing (QMB premiums, deductibles, copays) are carved out of the recoverable services at 42 USC § 1396p(b)(1)(B)(ii), protecting partial-dual-eligible families from recovery against Medicare-related Medicaid spending.2

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 deceased recipient who was 55 or older when they received nursing-facility services, home- and community-based services, and related hospital and prescription-drug services, and from a recipient of any age who was permanently institutionalized.2 Specifically:

(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.

Medicare cost-sharing carve-out: the statute itself carves out "medical assistance for medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title", the Qualified Medicare Beneficiary (QMB) / Specified Low-Income Medicare Beneficiary (SLMB) / Qualifying Individual (QI) premium and cost-sharing exclusion, from the optional 55+ recovery (42 U.S.C. § 1396p(b)(1)(B)(ii)).2

Long-term care insurance cuts the other way under (b)(1)(C). Where a state disregarded assets or resources because the individual held a long-term care insurance policy, the state shall seek recovery from that individual's estate for nursing-facility and other long-term care services, and for that individual the expanded estate definition at (b)(4)(B) becomes mandatory rather than optional. That mandate does not apply to someone covered under a qualified State long-term care insurance partnership, or under a State plan amendment approved as of May 14, 1993 that meets the same consumer-protection standard. Confirm your state's partnership status with the Administration for Community Living before treating a policy as recovery protection.

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, which the statute carves out of the optional 55+ recovery at (b)(1)(B)(ii).

States that elect only the federal floor recover only NF/HCBS/related services from 55-and-older probate estates. Massachusetts (post-2024 reform)3, California (post-SB 833)4, Texas5, Pennsylvania6, Vermont7 and New Mexico8 each do both on their own state rules.

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 to non-probate assets such as joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangements.2 The expanded-definition statutory text:

"[The estate] may include, at the option of the State ... any other 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 expanded states we have confirmed against their own statutes or rules include Ohio, Iowa, Indiana, Wisconsin, New Jersey, Nevada, Nebraska, New Hampshire, Minnesota, Montana, North Dakota, Oregon, South Dakota, Utah, Virginia, Washington, West Virginia and Wyoming. Kansas and Idaho are also commonly listed as expanded; we have not confirmed either against a state source.

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. Ohio, Nevada, New Hampshire, New Jersey and Virginia are confirmed on both counts against state sources.1 Iowa, Kansas, Indiana, Wisconsin, Nebraska, Idaho, South Dakota, Utah and Wyoming are commonly grouped with them, though for several of those we have confirmed the expanded estate definition without confirming the service election.

Compare with states that elect NEITHER expansion (federal floor only, probate estate only): Massachusetts (post-2024 reform), California (post-SB 833), Texas, Pennsylvania, New Mexico, Oklahoma, South Carolina and Vermont. Mississippi is the near miss advocates cite as a best-practice example: it limits services to the federal floor, but its recoverable estate reaches property held in shared ownership, so it is not a probate-only state.2

State-by-State Matrix

Below is our 51-jurisdiction matrix (50 states + DC) as of mid-2026. Federal law sets the floor; each state then decides whether to limit recovery to probate assets or expand it to non-probate assets, and may set a minimum-claim threshold (for example, Texas does not pursue recovery from estates under $10,000, and Georgia waives recovery against the first $25,000 of an estate for deaths on or after July 1, 2018).2 We recommend direct lookup of the state's State Plan Section 4.17(b) Amendment at medicaid.gov for canonical confirmation.

How to read the sourcing in this table. Two columns are systematically sourced and two are not, and the difference matters more than any single row.

• Estate Scope and Services are traced, state by state, to that state's own statute, administrative rule, or Medicaid-agency page. Where we hold a verified source, the row carries the citation in our published source. Where we do not, the cell says [UNVERIFIED]: that classification comes from secondary compilations we have not confirmed against the state, and you should treat it as a lead to check rather than an answer.
• Threshold, TEFRA, and Recent Reform are not individually sourced for most states. Read every entry in those three columns as a starting point for your own lookup, even when the rest of the row is sourced.

State policy also changes quickly. Verify before acting.

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)
• [UNVERIFIED]: no verified state source behind this classification

Key sourcing caveats:

• Connecticut's classification varies across sources. CT adopted narrowing only for the Medicaid expansion population; status for the non-expansion 55+ group is unverified.
• Maryland, Hawaii, Delaware and Colorado are described differently across sources, and we hold no verified state source for any of them. Medicaidlongtermcare.org lists them as probate-only; older Wikipedia/AARP differ. Vermont and New Mexico used to sit in this group and no longer do: both are now confirmed probate-only against their own state rules.
• Five rows changed in this revision because a verified state source contradicted the classification we had published. Rhode Island moves from expanded to probate-only, and its TEFRA practice from active to inactive, because the R.I. Gen. Laws § 40-8-15 lien does not attach during the beneficiary's lifetime and reaches only probate property at death.23 West Virginia moves from probate-only to expanded, because BMS Provider Manual Chapter 900 defines the recoverable estate through the state estate-tax definition at W. Va. Code 11-11-2(b)(4) rather than the probate estate.28 Minnesota moves from probate-only to expanded, because Minn. Stat. 256B.15 subd. 1a(b) reaches life estates, joint tenancies, pay-on-death accounts, living trusts and transfer-on-death deeds.16 Missouri's row is rewritten: Mo. Rev. Stat. 473.398 does run against the probate estate, but the Nonprobate Transfers Law at Mo. Rev. Stat. 461.300 lets the state reach a beneficiary of a non-probate transfer when the probate estate falls short, so probate avoidance is not a shield in Missouri.2 Pennsylvania's Services entry moves from all-services to the long-term-care scope, because 55 Pa. Code Chapter 258 does not reach general medical coverage received at 55 or older.6
• Florida is the one row where we cannot answer the question the column asks. Fla. Stat. § 409.9101 prescribes the probate-claim mechanism and creates the debt for assistance received after age 55, but it contains no definition of "estate" and no provision addressing the federal expanded-definition option. So we do not classify the row, and no Florida non-probate transfer should be treated as beyond the Agency for Health Care Administration's reach on the strength of that silence. Florida law does say plainly that no recovery may be enforced against property exempt from creditors' claims under the state constitution, which is how the homestead exemption at Art. X § 4 reaches estate recovery.10
• Tennessee's threshold is a cost-effectiveness release, not a flat $25,000 auto-waiver: TennCare treats all claims of $10,000 and below as not cost effective and releases them. Its State Plan defines the recoverable estate by reference to Tennessee probate law rather than by a flat probate-only rule.2
• Maine narrowed its services to the federal floor effective November 24, 2021, and its expanded estate definition expressly excludes joint tenancy in real property.14 North Carolina's expanded definition applies only to a recipient covered by a qualified long-term care partnership policy.2 The District of Columbia recovers for the federal-floor services only, and reaches property that does not pass to another person at death.10
• Alabama is confirmed probate-only against the current state rule. Ala. Admin. Code r. 560-X-33-.05 defines the recoverable estate as "all real and personal property and any other assets included within the individual's estate as defined by Alabama Probate Law," and neither that rule nor the Agency's estate-recovery Q&A sets a minimum-estate dollar threshold. For the 55-and-older group the Agency seeks recovery "for all approved medical assistance," except Medicare cost sharing. The undue-hardship waiver is narrow: it requires convincing evidence that the estate is an income-producing asset such as a family farm or business that is the sole income-producing asset of one or more heirs, and the request must be made within 30 days of the Agency's notice. Alabama also uses TEFRA liens on the real property of permanently institutionalized recipients, and no lien is required for recipients receiving HCBS waiver services.9
• Georgia's $25,000 is not a minimum-claim threshold like the others in this column. Georgia waives its claim against the first $25,000 of any estate subject to recovery for deaths on or after July 1, 2018, so a larger Georgia estate keeps that first $25,000 too.2
• Louisiana's threshold is a statutory minimum-recovery floor, and it is the higher of the two figures rather than either one: La. R.S. 46:153.4 directs that the department "shall not institute estate recovery on the first fifteen thousand dollars or one-half the median value of the homestead in each parish whichever is higher." Louisiana also does not impose liens on a living recipient's property; at death LDH instead acquires a privilege on the deceased recipient's succession, reaching the gross estate under Louisiana succession law. Recovery must be skipped where it would be "economically inappropriate in relation to the expenses of the recovery," undue hardship exists as of right "if an heir's family income is three hundred percent or less of the applicable federal poverty guideline," LDH may compromise, settle, or waive recovery for good cause, and it must reduce recovery for heirs' reasonable and necessary homestead-maintenance expenses incurred after the recipient's admission to a long-term care facility.2
• 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: MDHHS states its estate-recovery program applies only to assets subject to probate court administration, and that once a recipient is subject, the claim reaches all services after the 55th birthday, long-term care and non-long-term care alike.15 A Long-Term Care Partnership exception is widely reported to trigger expanded recovery for partnership policy holders; we have not confirmed that against a Michigan source.
• Nevada has a "Deed Upon Death" statute (NRS 111.655–.699) that is statutorily distinct from a Lady Bird (enhanced life estate) deed.

How Estate Recovery Differs Across States

Every state operates inside the same federal frame described above: the mandatory recovery floor for recipients 55 and older, the categorical protections for a surviving spouse and certain children, and the undue-hardship waiver requirement.2 What varies, often dramatically, is everything Congress left to state choice. Three decisions drive most of the difference. First, whether the state recovers only from the probate estate or expands into non-probate assets such as joint tenancy, Transfer-on-Death and payable-on-death accounts, and living trusts. Second, whether it recovers only nursing-facility, HCBS, and related services or every Medicaid service a recipient received at 55 or older. Third, how it sets its minimum-claim threshold and how generously it administers hardship waivers. A probate-only, federal-floor state such as California, Vermont, or post-2024 Massachusetts protects far more of a family's home than a maximum-scope expanded state such as Ohio or Iowa. The state-by-state matrix above is the quick reference; the state guides below are the full walkthroughs.

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

Federal law mandates categorical bars on estate recovery: recovery may be made only after the death of a surviving spouse and only when there is no surviving child who is under 21 or who is blind or permanently and totally disabled.2 Those two bars apply in every state regardless of the state's election of expanded scope. The statute adds two further bars at (b)(2)(B), for a resident sibling and a resident caregiver child, but writes them narrowly: by their own terms they apply "in the case of a lien on an individual's home under subsection (a)(1)(B)". Read the sibling and caregiver-child subsections below with that limit in mind, and check how your own state applies them.

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. A number of states actively pursue post-spouse-death recovery against assets that passed through, though we do not have a verified count. 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.

Resident sibling (lien-bounded)

42 USC § 1396p(b)(2)(B)(i): where a lien has been imposed on the home under (a)(1)(B), no recovery while a sibling who resided in the home for at least 1 year immediately before the recipient's admission to the medical institution "is lawfully residing in such home who has lawfully resided in such home on a continuous basis since the date of the individual's admission to the medical institution".2 Two things to read carefully here. The subsection does not require the sibling to hold an equity interest. It does require unbroken residence: the closing clause of (b)(2)(B) asks not only that the sibling live there now but that they have lived there continuously since the day the recipient entered the institution, so a sibling who moved out and later returned is outside the bar on the statute's face. And the whole subsection is written for the lien case rather than for every post-death recovery.

The equity-interest requirement people associate with siblings lives in a different subsection: 42 USC § 1396p(a)(2)(C) bars filing a pre-death TEFRA lien while "a sibling of such individual (who has an equity interest in such home and who was residing in such individual's home for a period of at least one year immediately before the date of the individual's admission to the medical institution)" lawfully resides there. A third version, also requiring an equity interest, appears in the transfer-penalty exception at (c)(2)(A)(iii). Check which one your state's estate-recovery rule actually tracks before assuming a sibling is or is not protected.

Resident caregiver child (lien-bounded)

42 USC § 1396p(b)(2)(B)(ii): where a lien has been imposed on the home under (a)(1)(B), no recovery while a son or daughter who:

• Resided in the home at least 2 years immediately before the recipient's admission to the medical institution, AND
• Establishes to the state's satisfaction that they provided care that permitted the recipient to reside at home rather than in an institution,
• "is lawfully residing in such home who has lawfully resided in such home on a continuous basis since the date of the individual's admission to the medical institution".2

As with the sibling bar, that closing clause carries real weight: the child must be living in the home now and have lived there without a break since the admission. A caregiver child who left for a stretch and came back should expect the state to question the protection, and should get an elder-law attorney's read before relying on it.

The far stronger caregiver-child tool is the lifetime transfer exception at (c)(2)(A)(iv), covered below. It is not lien-bounded, it works in every state, and it takes the home out of the estate before death rather than deferring a claim against it.

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: each state must establish procedures to waive recovery in cases of undue hardship.2

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, where CMS guidance points to roughly half 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 below a set multiple of the Federal Poverty Level (FPL) for a sustained period.
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

Advocacy reporting (Justice in Aging, late 2025) has identified Missouri and North Dakota as states that do not offer a federally-required hardship-waiver process, putting them out of compliance with 42 USC § 1396p(b)(3). State advocates have been encouraged to push for State Plan Amendment compliance; as of mid-2026 neither state is reported to have corrected the gap.

This is a significant federal compliance issue that has gone largely unaddressed by CMS. (Brevy has not independently confirmed either state's compliance status on a federal .gov source; treat it as advocacy reporting and verify before relying on it.)

Approval rates

Approval rates vary widely across compliant states. MACPAC's multi-state survey (in its March 2021 Report to Congress, Chapter 3) reported a wide range, from low-approval states such as New York to high-approval states such as Iowa. Illinois is reported to be the only state that publishes annual waiver statistics; consult the most recent Illinois Department of Healthcare and Family Services (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

Statutory basis

42 USC § 1396p(b)(1)(B)(ii): the optional 55+ recovery of state-plan items applies "but not including medical assistance for medicare cost-sharing or for benefits described in section 1396a(a)(10)(E) of this title". In other words, Medicaid payments for Medicare cost-sharing made on behalf of Medicare Savings Program enrollees are excluded from estate recovery.2

What's NOT recoverable

• 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), a Medicare Advantage plan that, under 42 CFR § 422.2, delivers Medicare and Medicaid benefits through a single entity, 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:29

• 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 Medicare cost-sharing 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. (In Ohio, the relevant integrated program is Next Generation MyCare, which the Ohio Department of Medicaid rolled out beginning January 1, 2026 as the successor to the MyCare Ohio demonstration.)29

Capitation overrecovery problem

Multiple states recover the full Medicaid managed-care capitation paid to managed care organizations (MCOs), regardless of services actually used by the deceased. If a recipient was enrolled in managed Medicaid LTSS for many months but used minimal services, the state recovers the full capitation for the whole enrollment period, even though actual service utilization was a fraction of that.

According to advocacy reporting by Justice in Aging (its March 2025 state guidance), a handful of managed-care states recover only the LTSS portion via actuarial analysis, while most managed-care states recover full capitation.

This is one of MACPAC's 2021 recommendations: 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 Medicaid asset-transfer penalty does not apply when an institutionalized individual transfers the home to a son or daughter who resided in the home for at least two years immediately before institutionalization and who, as determined by the State, provided care that permitted the individual to reside at home rather than in an institution.2 The exception is not self-executing: the statute makes the caregiving element a State determination.2

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, as determined by the State.2

Such a transfer does not trigger the look-back transfer penalty (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 ordinary look-back and transfer penalty.

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 the look-back.

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 look-back runs (60 months federally; 30 months in California for nursing-facility care effective January 1, 2026, counting only transfers made on or after that date), the trust corpus:2

• 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 a gold-standard national planning vehicle. Drafting one through an experienced elder-law attorney typically costs several thousand dollars, and the look-back runway is 60 months from funding in every state except California, where Medi-Cal applies a 30-month look-back for nursing-facility care effective January 1, 2026 and counts only transfers made on or after that date.2

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 state's Special Income Limit. The state must be remainder beneficiary up to the 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 42 U.S.C. § 1396p(f), the exemption ranges from a federal floor to a state-discretion ceiling, both indexed annually to the Consumer Price Index (CPI). In 2026 the floor is $752,000 and the ceiling is $1,130,000 (up from a $730,000 floor and $1,097,000 ceiling in 2025).2

The floor applies unless a state elects to substitute a higher amount, which it may do up to the ceiling.2

States using the higher ceiling in 2025–2026

A handful of high-cost states, including California, New York, Hawaii, Massachusetts, New Jersey, and Connecticut, have historically elected the maximum home-equity limit rather than the federal floor. State elections drift year to year, so 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)

The One Big Beautiful Bill Act of 2025 (OBBBA), at Section 71108, amends 42 U.S.C. § 1396p(f)(1) effective 1/1/2028: it caps the home-equity limit for non-agricultural homes at a flat $1,000,000, regardless of CPI indexing. Homes on a lot zoned for agricultural use remain under the existing indexed-limit rules.2

Whichever states are still electing a limit above $1,000,000 when the amendment takes effect will be brought down to the flat figure in 2028; we do not carry a verified current roster of ceiling-electing states, because elections drift year to year, so check your own state's rule. What the amendment does for states currently sitting at the federal floor is not settled on the face of the statute, and CMS has not yet issued implementing guidance, so do not assume a floor state's limit rises to $1,000,000 in 2028.2

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 mid-2026, CMS has not yet issued sub-regulatory guidance implementing the OBBBA cap. Implementation guidance is expected before the 1/1/2028 effective date so states can adjust their eligibility-stage processes.

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

Under 42 USC § 1396p(a)(2), the lien CANNOT be filed while any of three protected residents lawfully resides in the home:2

• The recipient's spouse.
• The recipient's child under 21, or blind or permanently and totally disabled child of any age.
• A sibling who has an equity interest in the home and lived there at least 1 year immediately before the recipient's admission to the medical institution.

A resident caregiver child is not on that list. The caregiver child appears one subsection later, at (b)(2)(B)(ii), where it bars recovery on a lien that has already been filed while the child continues to reside in the home. In practice that means a lien can be filed over a resident caregiver child; what it cannot do is be collected against the home while the child lives there.

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, South Dakota, Wisconsin.
• Occasional: Most expanded-recovery states.
• Inactive: California (post-SB 833), Massachusetts (post-Mason 2023), Tennessee, Texas, Louisiana (no liens on a living recipient's property)2, and Rhode Island, whose statutory lien does not attach during the beneficiary's lifetime at all and takes hold only at death.23

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) on recovered funds to the federal government, keeping only the state share. Because the federal government pays the majority of Medicaid costs in every state, a recovered dollar yields the state only a minority share in net revenue.

This is why estate recovery is rarely a meaningful state revenue source, even at top-state collection levels. A high-collecting state's headline recovery figure shrinks to a far smaller net once the federal share is returned, a tiny fraction of any state's total Medicaid spending.

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 (Massachusetts in 2024, California in 2017, Ohio's pending HB 318) 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

• National total: MACPAC's March 2021 Report to Congress (Chapter 3) found that states collected approximately $733.4 million from beneficiary estates in FY2019 (per the CMS-64 expenditure reports states file with CMS), which it calculated was only about 0.55 percent of total fee-for-service LTSS spending, the central data point for the "predatory but small" policy critique.30 (KFF frames the same $733 million against all Medicaid spending that year, roughly 0.1 percent.)
• Recovery rates by state: recovery as a share of LTSS spending varies widely, from a small fraction of a percent in low-recovery states such as Texas and Louisiana to materially higher shares in aggressive-recovery states such as Iowa, Idaho, and Minnesota.
• Historical trend: published HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) and Kaiser Family Foundation (KFF) baselines show slow growth in nominal recovery dollars over the past two decades; consult the latest ASPE and KFF issue briefs for the 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 the Acts of 2024; post-2024 figures are expected to fall sharply).
2. New York.
3. Pennsylvania.
4. Ohio (one of the most aggressive recovery states; HB 318 pending).
5. Wisconsin.

These five states together accounted for 38.5 percent of all FY2019 estate recoveries, per MACPAC's March 2021 Chapter 3 analysis of CMS-64 data.30

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

Historical ASPE baselines (informational only; current figures may differ) showed Alaska, Georgia, Michigan, Texas, Louisiana, New Mexico, and Utah reporting minimal or zero collections. Texas notably continues to collect very little despite its size, reflecting its probate-only scope and minimum-claim threshold.2

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, as the authors describe them:

• Reinforces that recovery returns only a small fraction of LTSS spending.
• Estate recovery implementation is associated with a statistically significant decrease in home equity in the overall sample, in Black and White subgroups, and among older elders.
• Estate recovery implementation is associated with a decrease in Medicaid enrollment among unmarried, low-income individuals 65 and older, the chilling-effect finding: some elders forgo Medicaid LTSS rather than expose their family home to recovery.

The authors frame this as among the most rigorous empirical studies of estate recovery in three decades. It supports the longstanding advocacy claim that recovery is "lots of pain for little gain", small fiscal recovery against large family hardship and a 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 the federal floor (Mississippi is cited as exemplary, an expanded-estate state that limits services to the floor).
2. Enhance hardship waivers (the eight categories above).
3. Set meaningful minimum-claim (cost-effectiveness) thresholds, as North Carolina, Illinois, and Georgia have done.
4. Increase transparency (Illinois is reported to be the only state publishing 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

Advocacy and press reporting (for example, KFF Health News coverage and Ohio reform-campaign accounts) has surfaced cases that put a human face on the policy debate: an Ohio estate billed for a brief Medicaid coverage period after the recipient died young of cancer; a large recovery against the modest estate of an Ohio woman whose only income had been a small Social Security Administration benefit; a lien placed on an Ohio widower's home after his wife's death; and large recovery bills against the estates of Iowans with disabilities. New York, meanwhile, has been reported among the lowest hardship-approval states in MACPAC's multi-state survey. (These figures come from advocacy and press accounts, not federal .gov sources; treat them as illustrative.)

These are the kinds of cases that drove Pro Seniors' multi-year reform campaign in Ohio, Massachusetts'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

Ohio elects every permissive expansion. The recoverable estate includes joint tenancy, life estates, living trusts, Transfer-on-Death (TOD) Designation Affidavits, payable-on-death (POD) accounts, and "other arrangements" (Ohio Revised Code 5162.21). Recovery reaches all Medicaid services for the 55-and-older population, not just NF/HCBS/related. Press reporting of Ohio Attorney General records has put collections at roughly $94 million in FY2024 (about $91.1 million in FY2023), figures not independently confirmed on a .gov page. Ohio is among the most aggressive recovery states.1

Authority: ORC §§ 5162.21, 5162.211, 2117.061; OAC 5160:1-2-07. Ohio also has TEFRA pre-death lien authority against the real property of a permanently institutionalized recipient and the recipient's spouse (ORC 5162.211). Pending reform: HB 318 (136th GA, Reps. Stephens/Brennan) would narrow recovery toward probate-only, with auto-waivers for low-value estates and a cap on home liens; as of mid-2026 it had not advanced beyond its initial Medicaid-committee referral.1

For full detail: Ohio Estate Recovery guide.

Tennessee: Federal Floor with a Minimum-Claim Threshold

Tennessee elects the federal floor only, recovering against NF/HCBS/related services for 55-and-older probate estates only. It waives recovery against smaller estates under a minimum-claim threshold set by T.C.A. § 71-5-116. CommonHealth and PCA-style services are exempt. Tennessee is inactive in TEFRA pre-death lien practice, and recovers a relatively modest amount 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 recovery to the 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 or after 8/1/2024). CommonHealth and PCA services are exempt (CMS approval pending). A minimum-estate auto-waiver continues. Pre-2024, Massachusetts was an expanded-recovery state and one of the top 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 is limited to the federal floor for the 55-and-older population. Modest-homestead hardship waiver. Surviving-spouse-and-RDP claims are prohibited. California is inactive in TEFRA pre-death lien practice. For integrated dual-eligible coverage, see the California Department of Health Care Services Medi-Medi Plans (EAE D-SNPs) program.

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 trace back to the same federal framework, every state recovers at least from the probate estates of recipients 55 and older for NF/HCBS/related services, then layers its own choices on top:2

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 is the hardship-waiver framework?

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

• Iowa, Indiana, Wisconsin, Nebraska, New Hampshire, South Dakota, Utah, Virginia, Wyoming, Minnesota, Montana, Nevada, North Dakota, Oregon, Washington, West Virginia (plus Kansas, on an unconfirmed classification): expanded-estate states. TOD/POD/JTWROS trapped. MAPTs essential.
• Texas, Vermont, Michigan: Lady Bird deeds are a genuine probate-bypass route in probate-only states, and Texas rules confirm enhanced-life-estate deeds are generally beyond MERP's reach.5 Florida and West Virginia are also named as Lady Bird states, but see the caution below before relying on one there.
• Mississippi: Best-practice example per Justice in Aging. It limits services to the federal floor while reaching shared-ownership property, and it expressly leaves life-estate interests and property transferred into a trust outside recovery.2
• Pennsylvania: Top-5 collector by absolute dollars but has "most generous" hardship policy per advocates, and it recovers for long-term care only rather than for everything a recipient received at 55 or older.6
• Missouri: do not treat a beneficiary deed, a payable-on-death account or joint tenancy as a shield. Missouri's recovery statute runs against the probate estate, but the Nonprobate Transfers Law lets the state reach the recipient of a non-probate transfer when the probate estate cannot cover the claim.2
• 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 ahead of the state's look-back window. No retained ability to revoke or amend; no retained beneficial interest in principal; no general power of appointment. Once the look-back runs, the corpus is out of countable resources for eligibility AND out of the recoverable estate (no legal title or interest at death).

The trust works in every state, but the runway is not the same length everywhere: the federal look-back is 60 months, while California applies a 30-month look-back for nursing-facility care effective January 1, 2026, counting only transfers made on or after January 1, 2026. Time the funding to your own state's window. Drafting one typically costs several thousand dollars.2

Outright lifetime gift, ahead of the look-back window

Removes the asset from the estate; the look-back is satisfied once the window passes, which is 60 months federally and 30 months in California for nursing-facility care as of January 1, 2026. Works in every state, on your state's clock.2

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

A federal exception: an adult child who lived in the home at least 2 years immediately before institutionalization and who, as determined by the State, provided care that permitted the parent to reside at home rather than in an institution can receive the home during the parent's life. The transfer does not trigger the look-back transfer penalty, and removes the home from the estate permanently. Works in every state, subject to the State's determination on the care element.2

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 and child

Mandatory federal protections that apply in every state: no recovery while a surviving spouse is alive, and none while there is a surviving child under 21 or a blind or permanently and totally disabled child of any age. The additional (b)(2)(B) bars for a resident sibling and a resident caregiver child are written for the lien case under (a)(1)(B), so confirm how your state applies them. Documentation matters for all of them.

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, TX, NC, NM, OK, PA, SC, VT, MI and DC are classified probate-only above on a verified state source. AK, IL, MD, HI and several others carry an [UNVERIFIED] flag in the matrix, which means we cannot tell you a TOD or POD designation is safe there. Three states need a specific warning. Missouri is not a safe place to rely on this: its recovery statute runs against the probate estate, but the Nonprobate Transfers Law at Mo. Rev. Stat. 461.300 lets the state reach a beneficiary-deed or joint-tenancy recipient when the probate estate falls short.2 Minnesota used to appear on the probate-only list and does not belong there: Minn. Stat. 256B.15 subd. 1a(b) reaches transfer-on-death deeds, pay-on-death accounts, joint tenancies and living trusts.16 Florida is unclassified: its estate-recovery act says nothing about the expanded definition either way, so no Florida non-probate transfer should be presented as beyond reach.10 Confirm your own state's row and its State Plan Section 4.17(b) Amendment before relying on a TOD, POD or joint-tenancy designation. Does NOT work in expanded-estate states (OH, IA, IN, WI, NE, NJ, MN, WV, WA, etc.), where the state's expanded estate definition reaches "joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement" under 42 U.S.C. § 1396p(b)(4).2

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 hinge on which the expanded estate definition under 42 U.S.C. § 1396p(b)(4) turns).2

The five states recognizing Lady Bird deeds

1. Florida. Recognized as a matter of Florida property law, but read the caution below before treating it as recovery protection.
2. Michigan. Michigan recovers only from assets subject to probate administration, so a deed that passes title outside probate does the work.15
3. Texas. Texas rules define the recoverable estate by reference to the probate estate, and enhanced life estate deeds are among the transfers generally beyond MERP's reach.5
4. Vermont. Vermont recovery is probate-only.7
5. West Virginia. Recognized in West Virginia conveyancing practice, but see the caution below.

Two of the five need a caution

Recognizing the deed and being unable to recover against it are different questions, and in two of these states our own reading of the state's rules does not support the second.

West Virginia is not the probate-only state the Lady Bird framing assumes. Its BMS Provider Manual defines the recoverable estate through the state estate-tax definition at W. Va. Code 11-11-2(b)(4) rather than the probate estate, and no West Virginia statutory or agency source we hold says the state recognizes an enhanced-life-estate deed as an estate-recovery carve-out, or that joint-tenancy, payable-on-death or life-estate property sits categorically outside recovery. Those claims appear only on secondary sites.28

Florida has never told us how far its recoverable estate reaches. Fla. Stat. § 409.9101 contains no definition of "estate" and no provision on the federal expanded-definition option, so we cannot say a Lady Bird deed defeats an Agency for Health Care Administration claim. What Florida law does give a family is stronger and better sourced: no recovery may be enforced against property exempt from creditors' claims under the state constitution, and the constitutional homestead exemption inures to the surviving spouse or heirs.10

In both states, get an in-state elder-law attorney's read before you record a deed and treat the house as safe.

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 Texas, Michigan and Vermont, where the state recovers from the probate estate only, 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 Florida and West Virginia, treat it as a probate-avoidance tool whose recovery effect is unsettled.

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 New York specialty. If you are not in New York (or one of the four other recognizing states), the federal spousal-impoverishment framework, the Community Spouse Resource Allowance (CSRA), Minimum Monthly Maintenance Needs Allowance (MMMNA), and Community Spouse Monthly Income Allowance (CSMIA), applies in every state and is the alternative. For 2026, the CSRA ranges from a federal minimum of $32,532 to a maximum of $162,660 under 42 U.S.C. § 1396r-5.31

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, would have prohibited recovery only when the home transfers to a Medicaid-eligible person or a low-income individual below a set Federal Poverty Level multiple. Did not advance.

Federal: OBBBA Implementation

OBBBA (Pub. L. 119-21) caps the non-agricultural home-equity limit at a flat $1,000,000 effective 1/1/2028. CMS sub-regulatory guidance is pending. The change indirectly expands the recovery universe over time.2

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, Reps. Stephens/Brennan, bipartisan). The bill would narrow recovery toward probate-only, auto-waive recovery against low-value estates, and cap home liens on modest homes. It had not advanced beyond its initial Medicaid-committee referral as of mid-2026.1

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 North Carolina's estate-recovery thresholds and undue-hardship criteria (effective Jan 2023), setting one of the higher minimum-claim thresholds among the states.

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 current federal mandate at 42 USC § 1396p(b), which requires every state to seek recovery from the estates of recipients 55 and older. This would let states choose whether to pursue recovery at all. It is the Schakowsky bill's policy substance.2

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. This addresses the over-recovery problem in the many states that deliver Medicaid LTSS through managed care.

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 an adult child caring for one, here is the practical decision tree. This framework is genuinely complex, and most families benefit from a one-time consultation with an elder-law attorney before acting on any of these planning tools.

- **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.

If LTSS is imminent (within months), a MAPT is too late. Focus on spend-down on exempt assets (home maintenance, prepaid funeral, vehicle), a Medicaid-compliant SPIA for spousal protection, and a caregiver-child analysis if an adult child has been in the home 2+ years.

Where to Get Help

Most states also have an AARP state office (aarp.org) and a NAELA state chapter that can refer you to in-state elder-law specialists, and Massachusetts families can reach the Massachusetts Law Reform Institute (MLRI) for estate-recovery reform guidance.

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

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.