Many people believe that after qualifying for Medicaid they do not need to worry about protecting their assets. What they may not realize is that Medicaid is authorized to attempt to recover certain costs the program has covered after a recipient passes away. In Arkansas, the Medicaid Estate Recovery Program (MERP) allows the state to seek reimbursement for benefits paid on behalf of a deceased recipient. This recovery process can put family property and wealth at risk. For that reason, incorporating Medicaid planning into your overall estate plan is essential if your goal is to protect assets for your heirs. To help ensure that your assets are safe, the attorneys at Wilcox Attorneys, PA help you to understand the Arkansas Medicaid Estate Recovery Program.
Medicaid’s Role in Long-Term Care
What Is the Difference Between Medicare and Medicaid in Arkansas?For many older adults in Arkansas, Medicaid is the only realistic way to pay for long-term care. Nursing home costs in Arkansas average more than $90,000 annually, making nursing home care unaffordable for the majority of residents. Medicare offers only short-term coverage for rehabilitation or skilled nursing care, while most private health insurance plans provide little or no assistance for extended care needs. Medicaid can cover the entire cost of long-term care, but the program limits eligibility to individuals with very few assets and low income. With a $2,000 “countable resources” limit, many applicants must spend down their savings and liquidate certain property. While qualifying solves the immediate challenge of paying for care, it also makes the estate subject to possible claims from the state after the recipient’s death.
How Estate Recovery Works in Arkansas
The Arkansas MERP authorizes the state to recover the value of Medicaid benefits provided to individuals age 55 or older, or to those permanently residing in a long-term care facility. The state generally targets the probate estate of the deceased recipient, which may include property titled solely in the decedent’s name at the time of death and assets that do not transfer automatically to another party. If a deceased Medicaid recipient leaves behind a home, a vehicle, or bank accounts that go through probate, the state may file a claim against those assets to recover expenses. While Arkansas currently does not seek expanded recovery from non-probate assets, any property passing through the probate process remains exposed to potential collection.
When Arkansas Medicaid Estate Recovery Is Not Allowed
The good news is that Arkansas state law includes certain protections that prevent immediate recovery under specific circumstances. Recovery is not permitted while a surviving spouse is alive. Likewise, if the deceased leaves behind a child under the age of 21, or a child who is blind or permanently disabled, the state must delay recovery until these circumstances change. Once the protected individual passes away or no longer meets the criteria, Arkansas may pursue the claim against the estate.
Arkansas law also allows for the possibility of avoiding recovery if it would create a substantial and unfair hardship for surviving heirs or if recovery is deemed to not be cost-effective. For a hardship waiver, the personal representative or beneficiaries may request a waiver from the Arkansas Department of Human Services (DHS) and each application is reviewed individually. Waivers are often granted if the property is the primary source of income for the heir, such as farmland or a family business, or if taking the property would cause severe financial distress. The request must be made within the deadline set by the state after it notifies the estate of its intent to recover. Applicants must provide documentation to support their case, and the final decision rests with the state agency.
The Use of Liens to Secure Recovery
In Arkansas, the state may place a lien on real property in the probate estate to secure repayment of Medicaid expenses. When a lien is recorded, the property cannot be sold or transferred until the claim is resolved. In certain cases, repayment may be postponed if the heir inheriting the property meets specific requirements, such as financial hardship or long-term residence in the home. The state may offer repayment plans or defer collection until the property is sold, or the heir’s circumstances change.
Protecting Your Assets from Medicaid Estate Recovery
The best way to shield your property from estate recovery is through proactive planning well before the need for Medicaid arises. Working with an experienced Arkansas Medicaid planning attorney can help you design a strategy that preserves your assets while maintaining eligibility for long-term care assistance.
Do You Have Additional Questions about the Arkansas Medicaid Estate Recovery Program?
For additional information, please sign up for one of our FREE estate planning seminars. If you have additional questions or concerns about the Arkansas Medicaid Estate Recovery Program, contact the experienced Washington County, Fayetteville, Springdale, Rogers, Bentonville, and Northwest Arkansas Medicaid planning attorneys at Wilcox Attorneys, PA by calling 479-443-0062 to schedule your appointment today.
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