Medicaid:

Recoveries From Nursing Home Residents' Estates Could Offset Program Costs

HRD-89-56: Published: Mar 7, 1989. Publicly Released: Mar 7, 1989.

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GAO reviewed the potential for estate recovery programs to help offset state and federal Medicaid nursing home costs.

GAO found that: (1) estate recovery programs provide a cost-effective way to offset state and federal costs, while promoting more equitable treatment of Medicaid recipients; (2) the absence of estate recovery programs creates inequities in the treatment of Medicaid recipients and their heirs, allowing recipients who still own a home at the time of death to leave an estate, while requiring those who do not own a home to apply most of their liquid assets toward the cost of their care before they become Medicaid-eligible; (3) about 14 percent of Medicaid nursing home residents in the eight states reviewed owned a home, with an average value of about $31,000; (4) of the eight states, only Oregon recovered Medicaid nursing home costs from the estates of Medicaid recipients and their spouses, six states had no estate recovery programs, and California had a recovery program, but was not recovering from the estates of surviving spouses; (5) by establishing recovery programs such as Oregon's, the six states could defray about $85 million of the estimated $125 million in Medicaid nursing home payments they would incur for homeowner recipients; (6) California could recover an additional $11 million if it recovered costs from surviving spouses' estates; and (7) Oregon and California limited their recovery programs to recipients 65 or over, due to confusion over whether federal regulations permitted them to recover from those under 65.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress passed legislation that requires states to establish estate recovery programs (OBRA 1993).

    Matter: Congress may wish to consider making mandatory the establishment of programs to recover the cost of Medicaid assistance provided to nursing home residents of all ages, from either their estates or the estates of their surviving spouses. The establishment of such programs would help to ensure that assets preserved through the new transfer-of-assets provisions can be used to defray Medicaid costs.

  2. Status: Closed - Implemented

    Comments: Congress passed legislation that requires states to establish estate recovery programs (OBRA 1993).

    Matter: Congress may wish to consider making mandatory the establishment of programs to recover the cost of Medicaid assistance provided to nursing home residents of all ages, from either their estates or the estates of their surviving spouses. The establishment of such programs would help to ensure that assets preserved through the new transfer-of-assets provisions can be used to defray Medicaid costs.

 

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