Maryland Medicaid estate recovery applies after death to recipients 55 or older who received long-term care -- here is how Maryland's rules work and what protections apply to your family.

Every state must operate a Medicaid estate recovery program under federal law, and Maryland carries out that obligation through the Maryland Department of Health (MDH). After a qualifying recipient of Maryland Medical Assistance dies, MDH may seek repayment for certain long-term care costs from the probate estate. Federal law builds in several mandatory protections -- for a surviving spouse, a minor child, and a blind or permanently disabled child -- that block recovery in many family situations. A hardship waiver is also available when recovery would impose genuine financial burden.

This guide covers who is subject to Maryland Medicaid estate recovery, what assets MDH can reach, who is protected, how to claim a hardship waiver, and how to respond when an estate receives a recovery notice.

Who Does Maryland Medicaid Estate Recovery Apply To?

Maryland Medicaid estate recovery is grounded in federal law. OBRA-93 (Pub. L. 103-66, Section 13612) enacted Section 1917(b) of the Social Security Act, now codified at 42 USC Section 1396p(b). This provision requires every state Medicaid program to recover certain long-term care costs from the estates of deceased recipients. The implementing regulation sits at 42 CFR 433.36, and CMS operational guidance is in State Medicaid Manual Section 3810.

Under the federal mandatory floor, Maryland must seek recovery from the estates of residents who were:

  • Age 55 or older at the time they received services, AND
  • Receiving nursing facility care, HCBS, or related hospital and prescription drug services paid by Medicaid.

The recovery program is focused on long-term services and supports (LTSS), not the general range of Medicaid benefits. A person who received standard Medical Assistance for routine medical coverage but not LTSS is not subject to estate recovery. The age threshold also applies at the time of service: care received before age 55 does not create a recovery basis, even if more care followed after 55.

Maryland Medical Assistance, administered by MDH, covers long-term care through nursing facility benefits and HCBS waivers including the Community Options Waiver. Maryland is a medically needy state, meaning applicants who exceed the standard income limits can still qualify for long-term care coverage by spending down excess income on incurred medical costs. The medically needy income level as of February 1, 2026 is $350 per month for an individual. This spend-down pathway does not affect the estate recovery obligation: qualifying LTSS services, regardless of whether the recipient entered Medicaid through income-cap or medically needy pathways, create the same potential recovery claim at death.

One federal carve-out is relevant here: Medicaid payments made solely for Medicare premiums and cost-sharing through the Medicare Savings Programs (QMB, SLMB, QI) are excluded from estate recovery under an ACA provision effective January 1, 2010. A person whose only Medicaid enrollment was through a Medicare Savings Program and who never received Medicaid LTSS would not have a recovery claim against their estate.

What Assets Can Be Recovered?

Maryland Medicaid estate recovery reaches the probate estate of a qualifying deceased recipient. The probate estate includes assets that the deceased owned in their sole name, without a beneficiary designation, joint tenancy, or other mechanism that would cause them to pass automatically outside of probate.

Common probate assets include:

  • Real estate titled solely in the deceased's name (no joint ownership, no transfer-on-death deed)
  • Bank accounts in the deceased's name alone with no payable-on-death (POD) beneficiary
  • Investment accounts in the deceased's name alone with no transfer-on-death (TOD) designation
  • Personal property (vehicles, jewelry, household goods) owned individually
  • Business interests held solely in the deceased's name

Assets that typically pass outside probate -- jointly-held accounts with right of survivorship, accounts with POD or TOD designations, life insurance policies with named beneficiaries, retirement accounts with named beneficiaries -- are not directly reached by the probate estate recovery rule.

Whether Maryland also pursues recovery against non-probate assets under an expanded estate definition is a question for an elder-law attorney with current knowledge of MDH practice. Federal law at 42 USC Section 1396p(b)(4)(B) gives states the option to expand the definition of "estate" beyond probate assets. The extent to which Maryland uses that option is not definitively stated in a single public document, and families with significant non-probate assets -- particularly jointly-held real estate -- should get legal advice before assuming those assets are outside MDH's reach.

TEFRA liens. Federal law at 42 USC Section 1396p(a) permits states to file pre-death liens against the homes of permanently institutionalized Medicaid recipients to secure future recovery. A TEFRA lien does not force a sale during the recipient's lifetime, but it encumbers the property and will appear on a title search. The lien must be released if a surviving spouse, minor child, blind or disabled child, or a sibling with an equity interest who has lived in the home is present. If a lien has been filed and a protection applies, the administrator should contact MDH and request release.

Who Is Protected from Maryland Medicaid Estate Recovery?

Federal law at 42 USC Section 1396p(b)(2) creates categorical protections that block Maryland Medicaid estate recovery in specific family situations. These are mandatory, not discretionary.

Recovery cannot proceed while any of the following are true:

  • A surviving spouse is alive. Recovery is deferred until after the surviving spouse's death. Recovery may later be sought from the spouse's estate if property inherited from the Medicaid recipient is still identifiable. Families where the surviving spouse has significant assets or a valuable home may want to discuss planning options with an elder-law attorney during the spouse's lifetime.
  • A child under age 21 is alive. Recovery is completely blocked until the child turns 21.
  • A child of any age who is blind or permanently and totally disabled (using the SSI disability standard at 42 USC Section 1382c) is alive.

Two additional protections apply specifically to the home:

  • A sibling with an equity interest who lived in the home for at least one year before the recipient was institutionalized and has resided there continuously since.
  • A caregiver child (any age) who lived in the home for at least two years before institutionalization, provided care during that period that delayed or prevented institutionalization, and has continued living in the home since.

These protections must be asserted and documented by the estate administrator during the recovery process. They don't apply automatically. The estate administrator should communicate the relevant facts to MDH in writing, with supporting documentation, when notifying MDH of the recipient's death.

The caregiver child protection for estate recovery is related to but legally separate from the caregiver child transfer exception under 42 USC Section 1396p(c)(2)(A)(iv), which applies to the eligibility-period look-back rule rather than post-death recovery.

How to Claim a Hardship Waiver

Federal law at 42 USC Section 1396p(b)(3) requires Maryland to maintain procedures for waiving estate recovery when it would cause undue hardship. The CMS State Medicaid Manual Section 3810.C identifies three recognized hardship categories:

  1. The asset is the sole income-producing asset. If the primary estate asset is a family farm, family business, or other asset that represents the surviving household's sole income source, recovery can be waived to protect that livelihood.
  2. The asset is a homestead of modest value. Where the home is modest in value and the family would face genuine hardship from losing it, a waiver may apply.
  3. Other compelling circumstances. Maryland may recognize additional situations beyond these two baseline categories.

To apply, the estate administrator should contact MDH in writing, describe the specific hardship circumstances, and include supporting documentation (proof of income dependency, property appraisals, family circumstances). MDH will review and issue a determination. If MDH denies the waiver, the estate administrator has the right to a fair hearing.

A well-documented application makes a difference. An elder-law attorney can help the administrator build a complete hardship waiver submission, particularly in cases involving a family business or farm, or when the home has been the primary caregiver household's residence.

How to Respond If You Receive a Claim

When a Maryland Medical Assistance recipient dies, MDH will typically learn of the death through the state's vital records system. The estate administrator or executor should contact MDH proactively to understand whether a recovery claim applies, rather than waiting for a notice to arrive.

Contact information for MDH Medical Care Programs:

Steps for the estate administrator:

  1. Notify MDH of the recipient's death and request information on any outstanding recovery claim.
  2. Compile an inventory of the probate estate's assets and their values.
  3. If a mandatory protection applies (surviving spouse, child under 21, blind or disabled child), document the relationship and communicate it to MDH in writing.
  4. If a sibling or caregiver child protection applies, document the residency history and care provided.
  5. If hardship applies, prepare and submit a written waiver application with supporting documentation.
  6. Review any claim MDH asserts to verify it reflects only LTSS costs for services at age 55 or older, not Medicare Savings Program cost-sharing.
  7. If you disagree with the claim or a waiver denial, request a fair hearing within the deadline stated in the notice.

Probate should not close until MDH's recovery position is fully resolved. Making distributions to heirs before the claim is settled can create personal liability for the estate administrator. An estate attorney and an elder-law attorney working together can help sequence probate proceedings appropriately.

Frequently Asked Questions

It depends on how the home is held and whether any protections apply. If the home is titled solely in the deceased's name and passes through probate, MDH may include it in a recovery claim. But recovery is completely blocked if a surviving spouse is alive, a child under 21 is alive, or a blind or permanently disabled child of any age is alive. The caregiver child and sibling protections can also shield the home in specific circumstances. If none of these apply and the home passes through probate, MDH may pursue recovery up to the amount of Medicaid LTSS benefits paid.

HCBS services delivered through Maryland Medical Assistance waivers, including the Community Options Waiver, qualify as LTSS subject to estate recovery on the same terms as nursing facility care. The relevant question is whether qualifying long-term services and supports were received at age 55 or older, regardless of whether the setting was a nursing facility or the recipient's own home.

Yes. Maryland's medically needy spend-down pathway is an eligibility mechanism -- it determines how a person with income above the standard limit can qualify for coverage. Once qualified, the LTSS services they receive are paid by Medicaid and become the basis for a potential recovery claim after death. The eligibility pathway does not affect the recovery obligation.

Maryland can file a TEFRA lien against the home of a permanently institutionalized Medicaid recipient during their lifetime. The lien doesn't force a sale while the recipient is alive, but it encumbers the property and appears on a title search. Federal law requires the lien to be released if a qualifying protection applies (surviving spouse, minor child, disabled child, sibling with equity interest). If you believe a lien was filed and a protection applies, contact MDH and consider legal assistance.

These are two separate rules. The look-back (at 42 USC Section 1396p(c)) applies before and during a Medicaid LTSS application: it examines asset transfers in the 60 months before the application and can create a penalty period delaying eligibility. Estate recovery applies after death: it seeks repayment from the probate estate for LTSS costs Medicaid paid. Planning tools that reduce look-back exposure -- like irrevocable trusts executed more than five years before application -- can also reduce what remains in the probate estate available for recovery. But each rule requires separate legal analysis.

The hardship waiver allows MDH to forgo or reduce recovery when it would cause genuine financial hardship for the surviving household. The core qualifying situations are when the primary estate asset is the family's sole income source, or when recovery against a modest family home would cause real hardship. To apply, contact MDH in writing with a description of the hardship circumstances and supporting documentation. MDH issues a determination, and the administrator can request a fair hearing if the waiver is denied.

Maryland Medicaid estate recovery has clear rules and real protections. Brevy's care navigator can help you understand what applies to your family's situation and connect you with an elder-law attorney in Maryland.

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Find personalized help understanding Maryland Medicaid estate recovery 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.

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Brevy Care Team

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