A Look at Medicaid Estate Recovery Programs

The Omnibus Budget Reconciliation Act of 1993 included a mandate that every state must seek reimbursement from its Medicaid beneficiaries’ estates upon their death. All states attempt to recover long-term care costs paid for those individuals who were 55 or older or institutionalized when they received the Medicaid benefits.

Long-term care may include:
  • Nursing home care and related nursing facility services;
  • Community-based or home-based services; or
  • Any related hospital and prescription drug services.
There are exceptions to estate recovery. States’ rights to recover Medicaid benefits have some limitations. Recovery cannot be made:
  • Before the death of a surviving spouse;
  • If the individual has a surviving child who is under age 21 or who is blind or permanently disabled; and
  • Against one’s home on which the state placed a lien, unless additional protections for siblings and adult children are satisfied.

The states can recover directly from the estate of the deceased or by placing a lien on any real property owned by the person who received Medicaid coverage. In addition, both Idaho and Oregon statute define the estate, when it comes to Medicaid recovery, as “All real and personal property and other assets included within the individual’s estate, as defined for purposes of state probate law, and any other real and personal property and other assets in which the individual had any legal title or interest at the time of death, to the extent of such interest, including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.”

For credit unions, each state may take a different approach when attempting to make a recovery. In Oregon, if the account is solely owned, the state may make a claim of an account with less than $25,000 following the process in ORS 723.466. Idaho credit unions may see writs of garnishment attempting to claim the funds, and even requests for information. While the state may not recover as long as there is a surviving spouse, it may claim against the estate when the surviving spouse passes away.

Question of the Week
Q. When is a certificate of deposit (share certificate) presumed abandoned in Idaho, Oregon, and Washington?

A. In Washington, a non-renewing certificate of deposit (share certificate) is presumed abandoned three years after maturity. If the certificate is automatically renewing, it is presumed abandoned three years after the expiration of the initial time period. If the certificate’s renewal period occurs in less than one year, then tolling of the three-year abandonment begins after one year from the maturity.

In Oregon, certificates are presumed abandoned after three years. Maturity for all types of certificates is upon the expiration of the certificate’s initial time period.

In Idaho, certificates are presumed abandoned five years after maturity. This includes automatically renewing certificates after their initial time period.

Note, however, all three states provide that, in the case of any renewal to which the owner consents at or about the time of renewal by communicating in writing with the credit union, the property is matured upon the expiration of the last time period for which consent was given.

Also, in all three states, if, at the time provided for delivery in the unclaimed property statute, a penalty or forfeiture in the payment of interest would result from the delivery of the property, the time for delivery is extended until the time when no penalty or forfeiture would result.

Related Links

RCW 63.29.060
ORS 98.308
IDS 14-506

Compliance Alerts

National Credit Union Administration

NCUA Releases Office of Minority and Women Inclusion Annual Report to Congress: The NCUA released its OMWI annual report to Congress which provides information on the NCUA’s progress in 2020 in advancing diversity, equity, and inclusion in its workforce.

NCUA Board Renews Prompt Corrective Action Relief: The NCUA Board approved an interim final rule which provides PCA relief for credit unions. First, temporarily reduces earnings retention requirements for federally insured credit unions classified as adequately capitalized. Second, permits an undercapitalized credit union to submit a streamlined net worth restoration plan if it became undercapitalized predominantly because of share growth.

Consumer Financial Protection Bureau

CFPB Releases Annual Fair Lending Report to Congress: The CFPB released its annual Fair Lending Report to Congress which provides insight into the work the CFPB has done in 2020 to promote the Bureau’s fair lending mission.

Office of Foreign Assets Control

OFAC has updated the SDN list as of April 15. The last update prior to this was April 8.

Posted in Compliance News, Compliance News.