The State of Georgia has announced that its Medicaid Estate Recovery Program will go into effect on May 1, 2006. If you have a loved one who receives Georgia Medicaid assistance for nursing home, community based services or medical care, they likely received a Notice within the last couple of weeks concerning this impending program. Georgia’s Notice advises Medicaid recipients that they may “opt out” of Medicaid coverage (stop receiving Medicaid benefits) and not be subject to Estate Recovery. However, time is very limited because the election to withdraw from Medicaid must be made and communicated (in writing) to the local Department of Family and Children Services (DFCS) before March 31, 2006.

What is Estate Recovery? Estate Recovery refers to Medicaid’s ability to recoup amounts it has paid to a nursing home, for medical care or otherwise after the recipient’s death. This includes the ability to recover amounts from some assets that had been “exempt” during the Medicaid recipient’s lifetime, particularly the recipient’s home. That is, although the value of a Medicaid recipient’s home is exempt from the “spend down” requirement during their lifetime, Georgia Medicaid can place a lien on the home after it has made payments on a recipient’s behalf for six months. After the recipient’s death, Medicaid will proceed against the decedent’s estate by either enforcing its lien or by becoming involved in the decedent’s estate to force sale of the home so that it can collect from the sales proceeds reimbursement of amounts paid by the Medicaid program on the decedent’s behalf. Estate Recovery can apply to other assets such as life insurance benefits, most annuities and other assets of the decedent who benefited from Medicaid.

Federal law mandated that the States enact and administer Estate Recovery, and Georgia’s legislature passed its enacting legislation in 2004. Even though Georgia’s law was passed in 2004, they are giving a limited advance notice and opt out period prior to commencing enforcement of Estate Recovery, but they are also relying on the federal legislation date to impose Estate Recovery retroactively to August 2001, for those who remain or become affected by Estate Recovery after May 1!

Delays and Exceptions. Estate Recovery may be delayed if a surviving spouse or a dependent child lives in the home after the Medicaid recipient’s death. There is also an ability of the recipient’s survivors to request a “hardship waiver” of the application of Estate Recovery. In addition, an estate valued at $25,000.00 or less will not be subjected to Estate Recovery.

Short Time Period and Technicalities. Again, there is only a very limited amount of time in which to make an opt out election to withdraw from Medicaid and cease receiving those benefits – March 30, 2006, is the deadline! As with any government program, there are a number of technical aspects involved in determining if a Medicaid recipient is subject to Estate Recovery (virtually all recipients are subject to it) and relating to the application of Estate Recovery in a specific situation. Time is of the essence, and any family affected should consult a certified estate planning or elder law attorney as soon as possible to discuss your unique circumstances and options.

You may also want to contact your local DFCS office with questions. The Dalton, Georgia, Regional Office may be contacted at 1-888-408-1004 or locally at 706-272-2924. The office is located at 1508 N. Thornton Avenue, Suite 100, Dalton, Georgia 30720.

(Copyright © 2006, all rights reserved. Provided by Martin L. Pierce, Attorney at Law, MPierce@MartinPierceLaw.com, 423.648.4303. Martin is a Business and Tax attorney who is Certified as an Estate Planning Specialist and is a Certified and Charter Member of the Christian Financial Professionals Network™ (CFPN™).

DISCLAIMER: This article provides general coverage of its subject area. It is provided free, with the understanding that the author, publisher and publication do not intend this article to be viewed as rendering legal advice or service. If legal advice is sought or required, the services of a competent professional should be sought. The author and the publisher shall not be responsible for any damages resulting from any error, inaccuracy or omission contained in this publication.)