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.
The blog reports information of interest to seniors, their families, and caregivers. Recurrent themes are asset and decision-making protection, and aging-in-place planning.
Monday, June 9, 2025
A Beacon of Hope for Seniors’ Families: Federal Court Protects Ohio Homeowners from Aggressive Medicaid Debt Collection
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.
Thursday, May 15, 2025
Understanding Survivorship Claims and Medicaid Liens in Wrongful Death Cases
When navigating elder law, families often focus on protecting assets, ensuring healthcare coverage, and maintaining an independent quality of life. A lesser-known issue that can significantly impact families—especially those relying on Medicaid for long-term care—is how Medicaid estate recovery and liens interact with wrongful death lawsuits, particularly with survivorship claims. A recent case sheds light on this complex intersection, raising important considerations for families and their legal strategies. This article will explore survivorship claims, other components of wrongful death claims, and the implications of Medicaid liens, which can discourage families from pursuing such cases.
- Pain and suffering endured by the deceased due to the injury or negligence that led to their death.
- Medical expenses incurred for treatment of the injury.
- Lost wages or earning capacity if the deceased was unable to work due to the injury.
- Loss of financial support: Compensation for the income or financial contributions the deceased would have provided to family members.
- Loss of companionship or guidance: Damages for the emotional and relational impact of the loss, such as the absence of a parent’s guidance or a spouse’s companionship.
- Funeral and burial expenses: Costs incurred by the family for the deceased’s funeral.
- Financial Disincentive: If a significant portion of a survivorship claim’s proceeds will go to Medicaid, families may question whether the emotional and financial cost of litigation is worthwhile. This is particularly true for smaller claims, where legal fees and Medicaid recovery could outweigh the net recovery.
- Complexity in Litigation Strategy: Families and their attorneys must carefully structure wrongful death lawsuits to distinguish between survivorship and wrongful death claims. Emphasizing wrongful death damages (which are often exempt from Medicaid liens) over survivorship damages may help preserve more of the recovery for heirs. However, this requires skilled legal counsel familiar with both elder law and personal injury law.
- Impact on Aging in Place Planning: For families planning to age in place, the threat of Medicaid estate recovery can complicate asset protection strategies. For example, a home owned jointly with right of survivorship may bypass probate and avoid Medicaid recovery in some states, but lawsuit proceeds from a survivorship claim do not enjoy the same protection. Families must work with elder law attorneys to anticipate these risks and explore options like trusts or exempt transfers during the Medicaid recipient’s lifetime.
- Emotional and Ethical Considerations: Pursuing a wrongful death lawsuit is often about seeking justice and closure, not just financial compensation. However, the prospect of losing much of the recovery to Medicaid may feel like an additional injustice, discouraging families from holding negligent parties accountable.
- Consult an Elder Law Attorney Early: Before applying for Medicaid or pursuing a lawsuit, consult an attorney to understand your state’s Medicaid recovery rules and plan asset protection strategies. For example, transferring assets to a disabled child or setting up a joint bank account with right of survivorship may shield certain assets from recovery.
- Structure Lawsuit Claims Carefully: Work with a personal injury attorney to emphasize wrongful death damages over survivorship damages, as the former are less likely to be subject to Medicaid liens. Ensure that settlement agreements clearly delineate the allocation of proceeds.
- Explore Hardship Waivers: Some states allow heirs to apply for an undue hardship waiver if Medicaid recovery would cause significant financial distress, such as displacing a dependent relative. For example, if a Medicaid recipient’s child provided caregiving and has no other residence, they may qualify for a waiver to protect the home or other assets.
- Use Non-Probate Assets: In states that limit Medicaid recovery to probate assets, titling assets like homes or bank accounts as joint tenants with right of survivorship, or using payable-on-death (POD) or transfer-on-death (TOD) designations, can help assets bypass the estate and avoid liens.
- Consider Medicaid Disenrollment: In cases where Medicaid benefits are minimal, particulalrly on a monthly basis (e.g., limited in-home care), families may consult an attorney about voluntarily disenrolling from Medicaid to avoid a large estate recovery claim later. This decision requires careful analysis of care needs and costs.
- Duration and Severity of Pain and Suffering: If the deceased experienced prolonged or intense pain due to the injury (e.g., weeks or months of suffering from medical malpractice or a severe accident), juries may award significant damages. Pain and suffering awards are often subjective and can be substantial if the evidence is compelling (e.g., medical records or witness testimony).
- Medical Expenses: High medical costs, such as extended hospital stays, surgeries, or specialized care, can increase the claim’s value. For example, a case involving months of ICU care could lead to a large award.
- Lost Earnings: If the deceased was working or had earning capacity before the injury, lost wages from the injury to death can add to the claim. This is less relevant for elderly or fully retired individuals towards judgment amounts in most cases.
- Evidence of Negligence: Strong evidence of egregious negligence (e.g., a nursing home’s failure to prevent severe bedsores) can lead to higher awards, including punitive damages in some cases.
- Economic Dependency: If the deceased provided significant financial support (e.g., a breadwinner supporting a spouse and children), the loss of future earnings or benefits can result in a substantial award. Calculations often consider the deceased’s income, life expectancy, and the duration of dependency (e.g., until children reach adulthood).
- Loss of Companionship or Guidance: Non-economic damages, such as the loss of a parent’s guidance for minor children or a spouse’s companionship, can be significant, especially if the family can demonstrate profound emotional impact. These awards are often higher for younger decedents with long-term familial roles.
- Funeral Expenses: While typically a smaller component, funeral and burial costs can add to the award.
- Jurisdictional Caps: Some states impose caps on non-economic damages (e.g., pain and suffering or loss of companionship), which can limit wrongful death awards. For example, California caps non-economic damages in medical malpractice cases at $500,000 for wrongful death as of 2025 (adjusted for inflation under Medical Injury Compensation Reform Act (MICRA). Cal. Civ Code § 3333 et seq.
- Survivorship Claims: Younger individuals may have smaller survivorship awards if the injury led to a quick death, limiting pain and suffering or medical costs. However, if the injury caused prolonged suffering, awards can still be significant. Lost wages are more relevant for younger, working individuals.
- Wrongful Death Claims: Younger decedents typically lead to larger wrongful death awards because their dependents (e.g., spouse, minor children) face a longer period of lost financial support and companionship. For example, the death of a 40-year-old parent supporting a family could result in millions in lost future earnings, far outweighing a survivorship claim.
- Survivorship Claims: Older individuals, especially those in nursing homes or receiving long-term care, may have stronger survivorship claims if they endured prolonged neglect or malpractice (e.g., untreated infections or falls). Pain and suffering awards can be significant, as elder abuse cases often involve egregious negligence. However, lost wages are rarely a factor for retirees.
- Wrongful Death Claims: Wrongful death awards for older decedents are often smaller because they are less likely to have dependents relying on their income. Loss of companionship damages may still apply (e.g., for a surviving spouse), but these are typically lower than for younger decedents with minor children. Jurisdictional caps on non-economic damages can further limit awards.
- Survivorship Claims: If the deceased had significant impairments (e.g., dementia, mobility issues), defendants may argue that their pain and suffering or life expectancy were already limited, potentially reducing awards. However, severe neglect or injury exacerbating these impairments (e.g., untreated pressure ulcers in a bedridden patient) can still lead to substantial pain and suffering damages.
- Wrongful Death Claims: Impairments may reduce wrongful death awards if they limited the deceased’s ability to provide financial support or companionship. For example, if the deceased was fully disabled and not contributing financially, economic damages may be minimal. However, emotional damages for loss of companionship can still be significant, especially for close family members.
- Survivorship Claims: If the injury caused severe impairments before death (e.g., paralysis or cognitive decline from a medical error), pain and suffering damages can be substantial, as the deceased endured significant harm. Medical costs for treating these impairments also increase the claim’s value.
- Wrongful Death Claims: Injury-related impairments may have less direct impact on wrongful death claims, as these focus on the survivors’ losses. However, if the impairment reduced the deceased’s ability to interact with family before death, it could strengthen claims for loss of companionship.
- Young, Healthy Deceased: A 35-year-old worker killed in a car accident after a brief hospital stay may have a modest survivorship claim (e.g., $100,000 for pain and suffering and medical costs) but a large wrongful death claim (e.g., $2 million for lost earnings and companionship for a spouse and children).
- Elderly, Impaired Deceased: An 85-year-old nursing home resident with dementia who suffered months of neglect before dying from untreated infections may have a large survivorship claim (e.g., $500,000 for pain and suffering and medical costs) but a smaller wrongful death claim (e.g., $150,000 for a surviving spouse’s loss of companionship).
- Middle-Aged, Disabled Deceased: A 60-year-old with pre-existing mobility issues who died due to medical malpractice after a prolonged ICU stay may have a balanced claim, with a significant survivorship award (e.g., $400,000 for pain and suffering and medical costs) and a moderate wrongful death award (e.g., $300,000 for loss of companionship and limited financial support).
Wednesday, October 5, 2022
Ohio Department of Medicaid Changes Treatment of Retirement Plans- Eases Burden of Planning
The Ohio Department of Medicaid (ODM) has finally adopted a change that means retirement accounts will no longer be counted as resources for determining Medicaid eligibility. This means that Ohio law now comports with existing federal law,"[a]fter six suspenseful years," as one law firm characterized the change, Understanding the change, and its impact, requires some appreciation of Medicaid and its role in paying for long-term care.
As most know, Medicare provides no real long-term care benefit. Medicare does not cover the cost of any care in a nursing home when a person requires only custodial care. Custodial care includes the following services:
- bathing
- dressing
- eating
- going to the bathroom
Generally, if the care or services that a person requires can be provided by another person without a degree or certification, Medicare does not cover the service. There is no licensing required for one person to assist another to bathe, or to dress themselves. There is, of course, licensing required for dispensing medical care, or providing certain rehabilitative care services such as physical therapy and occupational therapy.
Further, non-custodial care is not fully covered by Medicare. The best Medicare will do is pay for acute or rehabilitative care for a short period of time following a three-day hospitalization. The Medicare benefit provides payment for twenty (20) days of institutional care following hospitalization, and additional payments for necessary care up to a total of one hundred (100) days. After that one hundred (100) days, if a person needs long-term care (in-home assistance, assisted living, or a nursing home), that care is not paid for by private health insurance or by Medicare.
Nursing home care can cost, on average, $8-12,000/month. Most people cannot afford to pay out of pocket such a large amount for long, so many turn to Medicaid to cover these costs.
Medicaid will pay for the cost of a nursing home or assisted living facility, provided that the institution accepts Medicaid reimbursement, but Medicaid benefits are limited to the impoverished. That means that:
- A single person can have no more than $2000 to their name (in addition to a home and a car);
- A married couple is limited to a maximum of $139,000 and often less if the combined estate is less that $278,000 (the Community Spousal Resource Allowance or CSRA is one-half of the estate up to $139,000 but only one-half whatever the estate is valued at if the estate is less than $278,000).
To qualify, Medicaid applicants must "spend down," a euphemism for impoverishing themselves, especially since the person receiving their benefits may have to contribute their income to their cost of care.
Taxes and Retirement Accounts Under The Old Rules
For many people, retirement accounts (IRAs, 401ks, 403bs, deferred compensations, Roths, etc.), have replaced the home as the most valuable asset in their estate. Retirement accounts are owned by human beings (for example, trusts or LLCs cannot own retirement plans), and cannot be transferred between people except by death or divorce. Except for Roth IRAs, the taxes haven’t been paid on the accounts, so if individuals want to cash it out, they’ll incur significant income tax.
Safeguarding the home or after-tax investments from spend-down ahead of time under the Medicaid rules is and has been fairly straightforward. Simply, to protect the retirement accounts, the account would be liquidated and the tax incurred and paid. In addition to the tax consequence, liquidation often meant losing the future benefits of tax deferred growth. The options for safeguarding retirement accounts were limited, complex, expensive, and, for most people and advisors, frustrating.
Many people would simply leave their retirement assets exposed to spend-down risk, choosing to forego the tax incurred and necessary, and protect their home and other assets. Imagine a senior paying the cost and expense necessary to protect their $200,000 home, only to lose their $500,000 IRA left exposed. Those who chose against protecting the IRA in advance would, in crisis situations, end up with a severe tax consequences liquidating their IRA to either pay for care, or to protect other assets.
Under the old rules, if a couple had $500,000 in retirement assets, that amount counted toward their asset limit. They would have to spend their money until they reached $139,000 in total countable assets, incurring taxes along the way. Retirement accounts were not treated any differently than checking or brokerage accounts for eligibility purposes.
Taxes and Retirement Accounts Under The New Rules
Starting in 2016, Ohio changed how it takes Medicaid funding from the federal government. As part of that change, it had to align Medicaid with Social Security disability asset rules. Under Social Security rules, retirement accounts are not counted as assets if they pay out regular, periodic payments – those payments are counted as income instead. In other words, as long as you take your required minimum distribution, or set up a recurring distribution that looks like a required minimum distribution, then Medicaid wasn't supposed to consider how much is in that account, just how much those distributions are.
After four years, the Ohio Department of Medicaid finally started talking about making the change. Some counties adopted these rules consistently, others inconsistently, and some not all. Finally, after more than a year of promising guidance, ODM published Medicaid Eligibility Policy Letter 164 on May 26, 2022. This letter clarified how the Social Security rules applied to Ohio and confirmed that retirement account payouts should be treated as income, and the principal should not be counted.
The change means seniors won't be forced to cash out their retirement accounts in order to qualify for Medicaid. It will save taxes and allow more money for the applicant or the healthy spouse.
Some folks believe, and are being led to believe that the new rules completely protect retirement accounts. That is not true. The income is still countable, but estate planning can provide a solution in the form of a Qualified Income if the income is excessive. Even then, and more fundamentally Medicaid estate recovery still exists. Medicaid estate recovery permits Ohio to recover money paid in benefits from a Medicaid recipient’s estate.
Regardless, the change will make planning much comfortable for people with large retirement accounts.
Friday, March 4, 2022
The End of Medicaid Resource Recovery? Bill Ending Requirement Introduced
“Imagine losing a loved one and putting them to rest, only to have Medicaid come knocking on your door demanding you now pay for the long-term care your departed relative received -- an amount that has reached, in some cases, hundreds of thousands of dollars. Sadly, too many families experience this traumatic, horrific and cruel situation all the time. It is a well-kept secret with devastating and shocking consequences to families.”
By forcing the sale of family homes, Medicaid estate claims keep families in poverty and increase the risk of homelessness. The Stop Unfair Medicaid Recoveries Act will fix this problem so that low-income persons don’t have to risk the family home in order to receive needed long-term care.”
The bill, which has a dozen co-sponsors, was referred to the House Committee on Energy and Commerce, of which Rep. Schakowsky is a member. She is also Co-Chair of the House Democratic Task Force on Aging and Families.
Among other changes to the Social Security Act, 42 U.S.C. 1396p(a), the bill would add a new paragraph providing that “no adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be initiated, maintained, or collected on or after the date of the enactment of this paragraph. Not later than 90 days after such date, a State shall withdraw any lien in effect as of such date with respect to such medical assistance correctly paid.”
Several other organizations have voiced their support for this legislation:
“California Advocates for Nursing Home Reform is thrilled to support Representative Schakowsky's bill to eliminate Medicaid estate recovery,” says Patricia McGinnis, Executive Director of California Advocates for Nursing Home Reform. “It's about time we stopped punishing seniors and disabled individuals simply because they cannot afford private health care. Indeed, these recovery programs have turned Medicaid into an expensive loan rather than a benefit.”
“Medicaid estate recovery disproportionately affects people with disabilities and their families—particularly those struggling to afford housing, long term services and supports, and other home and community-based services,” says Bethany Lilly, Senior Director of Income Policy, The Arc of the United States. “The Arc is proud to support this legislation because it will help protect and expand the financial security of people with disabilities and their families.”
“Caring Across Generations is proud to support this legislation that will stop the attempts to recover funds for services that everyone should have access to when they need them, long-term services and support,” says Nicole Jorwic, Chief of Advocacy and Campaigns, Caring Across Generations. “Ending this policy that disproportionally impacts communities of color, people with disabilities and low-income families, will break a cycle of poverty and allow dignity for those who require these supports, and allow comfort to those Medicaid recipients at the end of their lives, knowing they can leave what they choose to their loved ones.”
“Medicaid estate claims prevent families from building generational wealth through homeownership, exacerbating existing economic inequities,” says Jennifer Lav, Senior Attorney at the National Health Law Program. “These rules are especially detrimental to families of color that have lower homeownership rates because of discriminatory lending and housing policies, and the families of people with disabilities, who need months or years of long-term services and supports. As long-time advocates, the National Health Law Program strongly supports The Stop Unfair Medicaid Recoveries Act and calls on Congress to pass it as a means of addressing systemic inequities in both health care and housing.”
The Stop Unfair Medicaid Recoveries Act is endorsed by Justice in Aging, California Advocates for Nursing Home Reform, The Western Center on Law and Poverty, The Arc of the United States, Caring Across Generations, The National Domestic Workers Alliance, Families USA, and Easterseals.
The bill’s authors are looking for families who have experienced Medicaid estate recovery to share their stories to educate members of Congress and seek their support for this legislation. If you know of any families who would be willing to share their story, please contact: info@justiceinaging.org.
Wednesday, September 29, 2021
Scrivener’s Error and Limited Power of Appointment Do Not Make Property Available to State to Recoup Medicaid Benefits
A recent Massachusetts land court ruling is instructive regarding the extent to which states will go in attempting to collect resources for Medicaid.
Athena and Sotirios Koutoukis hired an attorney to transfer ownership of their real estate to their daughters, creating and retaining a life estate for their benefit. They also retained a power of appointment to convey the property to their children. Mr. Koutoukis received MassHealth (Medicaid) benefits before he died. After Mr. Koutoukis’s death, the attorney for the estate discovered that the deed included the words “tenants in common for life and further,” which was an error.
On a motion for summary judgment, the nonmoving party cannot create a dispute of material fact simply by declaring that it disputes the material fact. The nonmoving party is supposed to provide some evidence that disputes the fact; that is, some evidence that, if credited, would support the opposite of the claimed undisputed fact. On these cross-motions for summary judgment, the defendant Secretary of the Executive Office of Health and Human Services (EOHHS) has attempted to forestall summary judgment on the plaintiffs’ claim for reformation of a deed due to a scrivener’s error by the simple expedient of saying the affidavits provided by the plaintiffs do not support the claim, without providing any evidence of its own to the contrary.
As the affidavits do support the claim for reformation, there is no dispute of material fact. Based on the undisputed material facts and the applicable law, summary judgment shall enter reforming the subject deed to clarify that the parties’ intent was to create a life estate, and declaring that the life estate and the limited power of appointment in the deed do not make the subject property a
The court noted that state "has denied many of the asserted facts relating to the claim of scrivener’s error in the subject deed without providing any affidavits or other evidence whatsoever."Estate of Koutoukis, at p. 4.
The court concluded that the state cannot recoup Medicaid benefits from a Medicaid recipient’s property, left in a life estate notwithstanding a scrivener’s error, and a limited power of appointment. Estate of Koutoukis v. Secretary of the Executive Office of Health and Human Services (Mass. Land Ct., Dept. of the Trial Ct., No. 20 MISC 000004 (RBF), Sept. 17, 2021).
Wednesday, February 5, 2020
Community Spouse's Annuity Cannot Be Recovered by State
Tuesday, May 21, 2019
State's Medicaid Lien Filed After Death of Recipient Enforceable
The following are the facts in the case: Nursing home resident Margaret Edwards received Medicaid benefits for five months before she died. After she died, the state recorded a lien on her property in order to recover Medicaid benefits it paid on her behalf. The probate court appointed R.C. Wiesenmayer administrator for Ms. Edwards' estate, and he requested authority to sell Ms. Edwards' property. The nursing home filed a claim against the estate for unpaid bills. The state also filed a claim to recover Medicaid benefits. The trial court ruled that the state's lien was valid and had priority over the claim of the nursing home. The nursing home appealed, arguing that the state's lien was not valid because it was not recorded before Ms. Edwards died.
The Ohio Court of Appeals, Second District, affirmed the trial court's decision, holding that the state's lien is valid and has priority over the nursing home's claim. Noting that "the estate recovery program contemplates the recovery of Medicaid costs from the assets of deceased recipients," the court ruled that the state's Medicaid lien law "does not apply exclusively to living, permanently institutionalized recipients of Medicaid benefits, and consequently, that [the state] was not required to record its lien against [Ms.] Edwards’s property before she died."