Nebraska Medicaid Estate Recovery 2026: House & Estate Guide

Nebraska Medicaid estate recovery applies after the death of a recipient 55 or older who received long-term care services. If your parent or spouse was on Medicaid and received nursing-facility or home- and community-based care, the Nebraska Department of Health and Human Services may file a claim against their probate estate to recover what the program paid. Understanding exactly who is affected, what assets are at risk, and which protections apply is the first step to knowing whether your family needs to act.

This guide walks through how Nebraska implements the federal estate recovery rules, what counts as a recoverable asset, who is shielded by mandatory protections, and what to do if a claim arrives.

What Estate Recovery Is and Where the Rules Come From

Every state Medicaid program is required by federal law to operate an estate recovery program. The mandate comes from the Omnibus Budget Reconciliation Act of 1993 (OBRA-93), codified at 42 USC § 1396p(b). The implementing regulation is 42 CFR 433.36, with operational guidance in CMS State Medicaid Manual § 3810.

The federal floor requires recovery from two populations:

1. Any permanently institutionalized Medicaid recipient of any age who received Medicaid-paid long-term services and supports (LTSS).
2. Any recipient who was 55 or older when they received nursing-facility services, home- and community-based services (HCBS), and related hospital and prescription-drug services.

States may expand recovery beyond this floor to cover all Medicaid services received after age 55, and they may also expand the definition of "estate" to reach non-probate assets. Nebraska does neither. Nebraska follows the federal floor and the federal-default probate-only estate definition.

The program is administered by the Nebraska DHHS Division of Medicaid and Long-Term Care.

Who Is Affected in Nebraska

Not every Medicaid recipient is subject to estate recovery. In Nebraska, the program applies only to recipients who meet both of these conditions:

• They were age 55 or older when they received Medicaid-funded services, and
• Those services included long-term care: nursing-facility care, HCBS waiver services, or related hospital and prescription-drug services received as part of a long-term-care episode.

Recipients who received only standard Medicaid medical coverage and never enrolled in long-term-care services are not subject to estate recovery. Children and adults receiving Medicaid for acute medical care, prescription coverage without a long-term-care episode, or mental-health services outside a long-term-care context are also not affected.

One practical note on Nebraska's eligibility rules: Nebraska's asset limit is $4,000 for a single applicant and $6,000 for a couple, which is higher than many states but still quite low. Nebraska is a medically needy spend-down state and does not use a Miller Trust. A recipient spends down income above $392 per month on medical and care costs to qualify. These mechanics mean that by the time someone has been on Medicaid long-term care for years, they typically have little in their probate estate. But the house, if it passes through probate, can still be subject to a claim.

What Nebraska Can Recover

Nebraska's recovery is limited to assets that pass through probate. The state has not adopted the federal option under 42 USC § 1396p(b)(4)(B) to reach non-probate transfers.

Assets typically subject to recovery (pass through probate):

• Real estate held solely in the deceased recipient's name with no transfer-on-death designation
• Bank accounts in the recipient's sole name with no payable-on-death beneficiary
• Investment accounts in the recipient's sole name with no beneficiary designation
• Personal property and vehicles titled solely to the deceased

Assets typically not subject to recovery (pass outside probate):

• Real estate owned jointly with right of survivorship
• Bank accounts with a named payable-on-death (POD) beneficiary
• Investment accounts with a named transfer-on-death (TOD) beneficiary
• Life insurance policies with a living named beneficiary
• Retirement accounts (IRA, 401(k)) with a living named beneficiary
• Property held in a properly funded irrevocable trust

The home is often the largest asset at issue. If the recipient owned the home solely in their own name with no survivorship or TOD designation, and the home passes through probate, DHHS can file a claim. If the home was jointly titled or had a transfer-on-death deed, it passes outside probate and is not reachable.

Nebraska law does permit TEFRA pre-death liens under 42 USC § 1396p(a) against the homes of permanently institutionalized recipients, but federal law requires those liens to be lifted if a spouse, minor child, or sibling with an equity interest moves into the home.

Who Is Protected

Federal law at 42 USC § 1396p(b)(2) establishes five categorical protections that block estate recovery as long as certain family members are alive or certain residency conditions are met. Nebraska follows all five.

Mandatory federal protections, Nebraska honors all five:

1. Surviving spouse. Recovery cannot proceed while the recipient's spouse is alive. This protection is automatic and requires no application. If the community spouse is still living, DHHS must defer any claim entirely.

2. Minor child. Recovery cannot proceed while a child of the recipient who is under age 21 is living. This applies regardless of whether the child inherited any of the estate.

3. Blind or disabled child. A child of any age who is blind or permanently and totally disabled under the SSI disability standard (42 USC § 1382c) blocks recovery for as long as they are alive.

4. Sibling with equity interest. If a sibling of the deceased had an equity interest in the home and lived there for at least one year before the recipient was institutionalized, and continues to lawfully reside there, recovery against the home is blocked.

5. Caregiver child. If an adult child lived in the home for at least two years before the recipient was institutionalized, provided care during that period that delayed or prevented institutionalization, and continued living in the home after the recipient entered institutional care, recovery against the home is blocked during that child's residency.

The first three of these are not just deferrals. While the surviving spouse, minor child, or disabled child is alive, the state cannot pursue or perfect any claim. The protections for the sibling with equity interest and the caregiver child are tied specifically to the home and their continued residency.

When one of the mandatory protections applies, the estate administrator (or surviving family member) notifies DHHS of the relationship during the estate-settlement process. DHHS must then stand down on that claim.

Hardship Waiver

Even when no mandatory protection applies, Nebraska is required by federal law at 42 USC § 1396p(b)(3) to have a process for waiving recovery in cases of undue hardship. The CMS State Medicaid Manual § 3810.C identifies three core hardship categories:

How to Respond to a Recovery Claim

When a Nebraska Medicaid recipient dies and their estate is being administered, here is the sequence of steps to follow with respect to estate recovery:

Step 1: Contact DHHS early. The Nebraska DHHS Division of Medicaid and Long-Term Care handles estate recovery. Contact them at the outset of estate administration to confirm whether a claim exists and what the claimed amount is. The phone number for Nebraska Medicaid is 1-855-632-7633.

Step 2: Assess whether a mandatory protection applies. Before anything else, confirm whether there is a surviving spouse, a child under 21, or a blind or disabled child of any age. If any of these relationships exist, the claim cannot proceed. Notify DHHS in writing.

Step 3: Assess whether the caregiver-child or sibling-with-equity protection applies. If an adult child or sibling lived in the home and meets the residency and caregiving requirements, document those facts and present them to DHHS.

Step 4: Identify which assets pass through probate. Only probate assets are subject to recovery. If the major assets of the estate pass outside probate (joint accounts, POD/TOD accounts, property with a surviving joint owner), those assets are not at risk.

Step 5: Consider a hardship waiver if warranted. If the estate consists largely of a family home of modest value, or if recovery would deprive the family of their only income-producing asset, file a written hardship-waiver request with DHHS.

Step 6: Respond within the probate timeline. DHHS must file its claim during the probate process. Claims must be presented to the estate administrator in accordance with Nebraska's creditor-claim deadlines under the Nebraska Probate Code. DHHS's claim has the priority of a creditor claim; it does not take priority over funeral expenses and estate administration costs.

If you receive a claim you believe is incorrect or exceeds the actual Medicaid payments made, you can request an accounting from DHHS and contest any overstatement.

Learn More

• Nebraska Medicaid Eligibility and Income Limits
• How to Apply for Nebraska Medicaid
• Medicaid Estate Recovery Explained

Find personalized help understanding Nebraska 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.