Medicare Savings Programs and Estate Recovery

Questions, even among experienced elder law lawyers, are (i) whether Medicare savings programs are subject to estate recovery after the program beneficiary dies, and (ii) whether making gifts causes ineligibility for Medicare savings programs.

The Medicare Savings Programs are:
1.  Qualified Medicare Beneficiary (QMB)
2.  Specified Low-Income Medicare Beneficiary (SLMB)
3.  Qualifying Individual (QI) [known as SLMB II in Maryland]
4.  Qualified Disabled and Working Individuals (QDWI).

At one time, States were allowed to recover Medicare Savings Program benefits through estate recovery, however, since 2010, when the Medicare Improvements for Patients and Providers Act MIPPA of 2008 went into effect, States are not allowed to recover for payments made for Medicare Savings Programs. States are, however, allowed to collect for Medicaid benefits other than Medicare Savings Program benefits.

For Medicaid benefits (other than Medicare Savings Program benefits) paid on behalf of an individual after such individual turned age 55, estate recovery is allowed for Medicaid payments that cover nursing facility services, home and community-based services, and related hospital and prescription drug services. In addition to estate recovery, the State can put a lien on the real property of a recipient of such benefits, however, there is a judicial process involved with placing a lien. Maryland generally relies on estate recovery and does not often place liens on real property in this context.

Regarding the implications of making a gift of one’s property, for Supplemental Security Income (SSI) benefits and for all Medicaid benefits other than Medicaid Savings Programs and for health insurance under the Affordable Care Act, a penalty is imposed when one gives away her assets, the penalty being a period of ineligibility for the benefit program as a consequence of the gift transfer. However, the rules to qualify to receive Medicare Savings Program benefits are silent regarding asset transfers, hence, there is no such transfer penalty with respect to Medicare Savings Programs.

William M. Gatesman assists clients in obtaining public benefits for their care needs, and advises clients concerning the implications of their actions with respect to their benefit eligibility.