For families with loved ones in nursing homes receiving Medicaid benefits, the fear of losing a family home to aggressive debt collection can feel overwhelming. Many seniors and their families already face financial hardship; Medicaid eligibility requires having less than $2,000 in assets. When a loved one passes away, families often expect to inherit little, but they shouldn’t have to worry about losing their home to the state’s improper efforts to recover Medicaid costs.
A recent decision from the United States District Court for the Southern District of Ohio, Plaisted v. Harper, No. 1:24-cv-634 (May 13, 2025), offers hope by affirming that families can fight back against unfair debt collection practices by state-contracted attorneys under the Fair Debt Collection Practices Act (FDCPA), protecting vulnerable homeowners like surviving spouses or disabled children
. This ruling is a significant step toward protecting vulnerable homeowners—such as surviving spouses, disabled children, or other qualifying individuals from aggressive tactics by lawyers contracted by the State of Ohio to collect Medicaid debts.
The Heart of the Case: Protecting Family Homes
Imagine owning your home with a loved one—your mother or spouse—who relies on Medicaid for nursing home care. After their passing, you become the sole owner through joint ownership with rights of survivorship. Suddenly, you receive a threatening letter from an attorney from a law firm, agents of the State of Ohio Attorney General's office, claiming that the State of Ohio is owed hundreds of thousands of dollars for your loved one’s Medicaid benefits and demanding payment. Worse, the lawyers file a public document with the county recorder’s office, listing your home’s address and suggesting the state has a claim against it. You’re left terrified, believing you might lose your home and end up homeless. This is exactly what happened to Jacqueline Holden and Medardo Funez, two Ohio residents who fought back and won an important legal victory.
Jacqueline, a disabled retiree, owned her home jointly with her mother, who received Medicaid benefits before passing away in 2023. After her mother’s death, Jacqueline became the sole owner. Lawyers working for the State of Ohio sent her a letter demanding $372,435.73 for her mother’s Medicaid costs and filed an affidavit with the county, publicly stating that the state might have a claim against her home. Medardo, a disabled veteran, faced a similar situation after his wife, who also received Medicaid, passed away in 2024. The lawyers sent him a letter claiming $65,398.27 and filed a similar affidavit. Both Jacqueline and Medardo were distressed, fearing they would lose their homes. Jacqueline hired an attorney to clear her home’s title, and the lawyers released the affidavit, but Medardo’s affidavit remained, leaving his home under a cloud.
Fighting Back: The Legal Battle
Jacqueline and Medardo took their fight to federal court in Ohio, arguing that the actions violated the Fair Debt Collection Practices Act (FDCPA), a federal law that protects consumers from unfair debt collection tactics, and amounted to slander of title, a legal claim for damaging someone’s property rights by making false claims about their ownership. They also pointed to federal Medicaid laws (42 U.S.C. §§ 1396p(b)(2) and (a)(2)) and Ohio law, which prohibit the state from placing liens on a home during the lifetime of a surviving spouse or disabled child living in the property.
Importantly, federal Medicaid law also allows other exemptions that protect a home from recovery, such as when the home is transferred to a caregiver child who lived with the Medicaid recipient for at least two years before their nursing home admission and provided care that delayed the need for institutional care (42 U.S.C. § 1396p(b)(2)(B)). Debt collectors may ignore or misrepresent these exemptions, claiming such transfers are “improper” to pressure families into paying.
Jacqueline and Medardo claimed the lawyers’ actions violated these protections by targeting their homes, which they owned outright after their loved ones’ deaths. The lawyers tried to dismiss the case, arguing that Jacqueline and Medardo didn’t have Article III standing—a legal requirement to show they were harmed in a way a court can address. The lawyers claimed the affidavits they filed weren’t technically “liens” under Ohio law and thus couldn’t harm the plaintiffs’ property rights.
The Court’s Ruling: A Victory for Families
The federal court rejected the lawyers' argument, delivering a powerful win for Jacqueline, Medardo, and families like theirs. The court explained that Article III standing requires three things: a concrete and specific injury that is real or imminent, an injury caused by the defendant’s actions, and a way for the court to fix the harm through a ruling, such as awarding damages or ordering the defendant to stop.
The court found that Jacqueline and Medardo met all three requirements:
•Injury: The court agreed that the affidavits created a “cloud” on their home titles, making it harder to sell or borrow against their property. This was a real harm, even if the affidavits weren’t formal liens.
•Cause: The harm came directly from the lawyers' actions—sending threatening letters and filing public affidavits suggesting the state could claim their homes.
•Redress: The court could fix the harm by ordering the lawyers to remove the affidavits (injunctive relief) or awarding damages for distress and financial impact.
Ultimately, the court rejected the lawyers' claim that the affidavits weren’t liens under Ohio law and thus caused no harm. It clarified that federal law, not Ohio law, determines standing. Under federal law, any encumbrance—a burden or claim on property—can harm property rights, not just formal liens. The affidavits were encumbrances because they publicly suggested the state had a claim against the homes, causing fear and potential financial loss. By recognizing this harm, the court allowed Jacqueline and Medardo’s claims to move forward, denying the lawyers' attempt to dismiss the case.
Why This Matters for Seniors’ Families
This ruling is a beacon of hope for families facing aggressive Medicaid debt collection. Here’s why it’s significant:
•Protection Against Unfair Tactics: Families often feel powerless against debt collectors backed by the state’s authority. The Plaisted v. Harper decision shows that courts can hold these companies and lawyers accountable under the FDCPA for deceptive or harassing tactics, giving families a fighting chance.
•Safeguarding Property Rights: Federal Medicaid laws (42 U.S.C. § 1396p) protect surviving spouses, disabled children, and other qualifying individuals—like a caregiver child who lived with and cared for a parent for two years before nursing home admission—from losing their homes to Medicaid recovery during their lifetimes. This ruling reinforces these protections, ensuring debt collectors can’t exploit loopholes by filing affidavits that scare families.
•Aging in Place: Seniors and Families can more confidently utilize Medicaid available exemptions protecting the home, encouraging and facilitating effective aging-in-place planning.
•Broader Exemptions: Beyond surviving spouses and disabled children, Medicaid law allows home transfers to others, such as a caregiver child, a sibling with an equity interest living in the home, or a minor child, without triggering recovery (42 U.S.C. § 1396p(b)(2)). Debt collectors may overlook or ignore these exemptions and claim they’re “improper” to pressure families. As demonstrated in Plaisted v. Harper, lawyers will file public documents they later will claim are meaningless or harmless, for the sole purpose of pressuring family members to relenquish or settle their rights. This decision empowers families to challenge such tactics.
•Hope for Justice: Hiring an attorney can be daunting for families with limited means, but Jacqueline’s success in clearing her title shows that legal action can work. The court’s openness to damages could help families recover costs or emotional distress.
•A Message to Debt Collectors: By denying the lawyers' motion to dismiss, the court signaled that debt collectors can’t dodge accountability with technical arguments. This decision may deter aggressive tactics and encourage respect for federal and Ohio laws protecting homeowners.
What Families Can Do
If you’re facing Medicaid debt collection efforts, here are steps to protect your home and rights:
•Know Your Rights: Federal law (42 U.S.C. § 1396p) prohibits Medicaid recovery from a home during the lifetime of a surviving spouse, disabled child, or other qualifying individuals, such as a caregiver child who lived with and cared for the Medicaid recipient for two years before nursing home admission. Ohio law also limits estate recovery to protect these exemptions. After death, recovery is limited to the recipient’s estate, making it critical to challenge improper tactics.
•Plan ahead: Consult a lawyer well in advance of need or crisis. Even if you don't currently qualify for a Medicaid exemption, you or someone in your family might with planning and reorientation, qualify.
•Don’t Ignore Letters: If you receive a letter claiming a Medicaid debt or notice a filing with your county recorder, act quickly. These documents can create a “cloud” on your title, complicating sales or refinancing.
•Seek Legal Help: Consult an elder law or estate planning attorney familiar with Medicaid recovery and the FDCPA. They can challenge unfair collection efforts, clear your title, or negotiate with collectors. Jacqueline’s success shows legal action can make a difference.
•Explore Exemptions: If you’re a caregiver child, sibling with an equity interest, or another qualifying individual, you may be eligible for a home transfer exemption. An attorney can help verify your status and protect your rights.
•Document Everything: Keep all letters, affidavits, or communications from debt collectors to support your case in court.
•Consider Legal Action: If a debt collector violates the FDCPA or slanders your title, you may be able to sue for damages or injunctive relief, as Jacqueline and Medardo did.
A Path to Protection
For families caring for loved ones on Medicaid, the fear of losing a home to debt collectors adds an unfair burden to an already challenging situation. The Plaisted v. Harper decision offers hope that the law can protect you, whether you’re a surviving spouse, disabled child, caregiver child, or other exempt individual. It shows that courts are willing to stand up for vulnerable homeowners, ensuring debt collectors can’t exploit families with aggressive tactics.
While the case continues, this early victory is a reminder that you have rights—potentially more than you realize—and the legal system can work to defend themIf you’re facing Medicaid debt collection, don’t lose hope. Reach out to an elder law attorney to explore your options, including exemptions that could protect your home. Decisions like Plaisted v. Harper are paving the way for fairer treatment of seniors’ families across Ohio.
In our next article, we’ll explore what damages families can recover under the FDCPA, including compensation for financial losses, emotional distress, and legal fees.
