Virginia Medicaid Estate Recovery 2026: House & Estate Guide

Virginia Medicaid estate recovery applies after death to residents 55 or older who received long-term care -- will Medicaid take your house in Virginia? Here's what the rules actually say.

Federal law requires every state to recover certain Medicaid long-term care costs from the estates of deceased recipients. Virginia carries out that obligation through the Virginia Department of Medical Assistance Services (DMAS), which pursues claims against probate estates after a qualifying recipient dies. The scope is narrower than most families expect: only people who received long-term care services at age 55 or older are subject to recovery, and several mandatory federal protections apply before any claim can be paid.

This guide walks through who is subject to Virginia Medicaid estate recovery, what assets DMAS can reach, who is protected, how the hardship waiver process works, and what to do if the estate receives a DMAS claim.

Who Does Virginia Medicaid Estate Recovery Apply To?

The legal foundation for Virginia Medicaid estate recovery is federal. Congress enacted OBRA-93 (Pub. L. 103-66, Section 13612), which added Section 1917(b) to the Social Security Act, now codified at 42 USC Section 1396p(b). This law requires every state Medicaid program to operate an estate recovery program and recover costs from certain deceased recipients' estates.

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

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

This is an important distinction. A person who received standard Medicaid medical coverage, but not long-term care services, is generally not subject to estate recovery. The recovery program targets long-term services and supports (LTSS), not the full range of Medicaid-covered benefits.

Virginia administers its Medicaid long-term care program, including LTSS, through DMAS. The state's CCC Plus Waiver delivers HCBS to eligible residents who meet nursing facility level of care. Virginia is a 209(b) state, meaning it uses its own eligibility criteria (which can differ somewhat from standard SSI-based Medicaid rules) for certain populations. Regardless of the eligibility pathway, the estate recovery obligation follows the services: if DMAS paid for qualifying LTSS for a recipient who was 55 or older, the estate may be subject to a recovery claim after that recipient's death.

One category worth knowing separately: Medicaid payments made solely for Medicare premiums and cost-sharing under Medicare Savings Programs (QMB, SLMB, QI) are excluded from estate recovery under a federal carve-out enacted by the Affordable Care Act in 2010. If a deceased person only had Medicaid through a Medicare Savings Program and never received LTSS, there is no estate recovery claim.

What Assets Can Be Recovered?

Virginia Medicaid estate recovery reaches the probate estate of a deceased recipient. Probate assets are those owned in the deceased person's sole name without a beneficiary designation or automatic survivorship mechanism.

Common probate assets include:

• Real estate titled solely in the deceased person's name (no joint tenancy, 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) titled to the deceased
• Business interests held individually

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

Whether Virginia also pursues recovery against non-probate assets through an expanded estate definition is a question that should be directed to an elder-law attorney familiar with current DMAS practice. The federal statute at 42 USC Section 1396p(b)(4)(B) gives states the option to define "estate" broadly enough to reach non-probate transfers, but the extent to which Virginia exercises that option is not definitively documented in the DMAS fact sheet. Families with significant non-probate assets -- particularly jointly-held real estate or TOD-designated property -- should consult an attorney before assuming those assets are insulated.

TEFRA liens. Federal law also permits states to file pre-death liens against the homes of permanently institutionalized Medicaid recipients to secure future recovery. Virginia does file TEFRA liens in some circumstances. A TEFRA lien does not force a sale during life, but it encumbers the property and must be satisfied before the home can be sold or transferred. If DMAS has filed a lien, it 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.

Who Is Protected from Virginia Medicaid Estate Recovery?

Federal law at 42 USC Section 1396p(b)(2) creates categorical protections that block estate recovery in certain family situations. Virginia must honor all of them.

Recovery cannot proceed while any of the following are true:

• A surviving spouse is alive. Recovery is deferred until after the surviving spouse dies. Note: recovery may be pursued against the surviving spouse's estate if property inherited from the Medicaid recipient is still identifiable at that later time, so families with surviving spouses and significant home equity may want to talk to an attorney about asset planning during the spouse's lifetime.
• A child under age 21 is alive. Recovery is fully blocked until the child turns 21.
• A child of any age who is blind or permanently and totally disabled (under the SSI disability standard at 42 USC Section 1382c) is alive.

Beyond those three, two additional household 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 lived 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 lived continuously in the home since.

These protections are not automatically granted. The family or estate administrator typically must document and assert them to DMAS during the recovery process. The caregiver child and sibling protections overlap with, but are legally distinct from, the federal hardship waiver and the eligibility-period caregiver child transfer exception under 42 USC Section 1396p(c)(2)(A)(iv).

How to Claim a Hardship Waiver

Federal law at 42 USC Section 1396p(b)(3) requires every state to provide a hardship waiver process. DMAS is obligated to offer one. The federal implementing guidance (CMS State Medicaid Manual Section 3810.C) identifies three core categories:

1. The asset is the sole income-producing asset. If the primary asset in the estate is the only source of income for the surviving household (a family farm, a family business), recovery can be waived.
2. The asset is a homestead of modest value. If the home's value is modest relative to the cost of recovery, and recovery would impose undue financial hardship on heirs who depend on it, a waiver may apply.
3. Other compelling circumstances. States have some flexibility to recognize additional hardship situations beyond these two baseline categories.

To apply for a hardship waiver in Virginia, the estate administrator should contact DMAS and request the waiver in writing, documenting the specific hardship circumstances. DMAS will review the claim and make a determination. If DMAS denies the waiver, the estate administrator has the right to a fair hearing.

The hardship waiver is not a guaranteed outcome -- it requires a factual showing that the statutory standard is met. Families who believe hardship applies should document the circumstances carefully and consider legal assistance to ensure the application is complete.

How to Respond If You Receive a Claim

When a Medicaid recipient dies, DMAS will generally learn of the death through the state's death records. The estate administrator or executor should contact DMAS proactively to understand whether a recovery claim applies.

Contact information for DMAS:

• Phone: 1-800-552-3431
• Website: dmas.virginia.gov
• Mailing address: Department of Medical Assistance Services, 600 East Broad Street, Richmond, VA 23219

Steps for the estate administrator:

1. Notify DMAS of the recipient's death and request information on any outstanding recovery claim.
2. Gather documentation of the probate estate's assets and their values.
3. If a mandatory protection applies (surviving spouse, minor child, disabled child), document the relationship and communicate it to DMAS in writing.
4. If a sibling or caregiver child protection applies, document the living arrangement and care history.
5. If hardship applies, submit a written waiver request with supporting documentation.
6. If DMAS asserts a claim, confirm the amount and verify it reflects only LTSS services rendered 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 timeframe specified in the DMAS notice.

Probate proceedings should not close until the DMAS recovery claim is resolved. The estate's attorney and the estate administrator should coordinate on sequencing to avoid distributions to heirs before DMAS's claim position is known.

An elder-law attorney can be valuable at this stage, particularly if the estate involves real property, a surviving spouse, or a disputed claim amount.

Learn More

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

Find personalized help understanding Virginia 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.