How Do I Know If I Have a Medicaid Lien?

To know if you have a Medicaid lien, the best way is to check the registry of deeds or county recorder where the property is located and review the public records on whether a lien was placed on your property.

Pre-Death Lien vs. Post-Death Lien

Once you discover that there is a lien on your property, knowing the type of lien can help you in dissolving the lien. Medicaid can place a lien on your property prior to or after the death of the Medicaid recipient.

A pre-death lien is special kind of lien placed on the house of a Medicaid recipient when it appears that such Medicaid recipient is an inpatient in a nursing facility and is not reasonably expected to be discharged and to return home. If such Medicaid recipient returns home, the lien can be dissolved.

A post-death lien, on the other hand, is a more typical kind of lien which is placed after the death of the Medicaid recipient. This lien is made as part of the Medicaid Estate Recovery Program, which requires the government to recover taxpayer dollars that were used to defray the owner’s health care costs.

For this reason, although the Medicaid recipient’s main residence (house) is not considered as part of the assets for purposes of determining Medicaid eligibility, the main residence is not exempted from Medicaid liens unless certain conditions are met.

Restrictions on Pre-Death Liens

If Medicaid attempts to place a pre-death lien on the Medicaid recipient’s property, this lien may be objected to if any of the following relatives live in the home:

• A spouse, child under 21, or blind or permanently disabled child of any age.
• A sibling with an equity interest in the home who has lawfully resided in the home for at least 1 year before the recipient’s admission to a medical institution.

Despite the lien being recorded before the death of the Medicaid recipient, the lien can be requested to be dissolved if the Medicaid recipient returns home.

Restrictions on Post-Death Liens

When the Medicaid recipient dies, states are mandated to initiate recovery from the estate of the Medicaid recipient. Otherwise, the states may run the risk of losing some or all of the federal Medicaid funding.

A post-death lien is the more common type of lien that is placed on homes of Medicaid recipients after the Medicaid recipient’s death. States cannot place a lien, however, if the following relatives in the home:

• Spouse
• Child below 21 years or blind or permanently and totally disabled
• Sibling who has an equity interest in the home and who was residing in the home for a year immediately before the date of the person’s admission to the medical institution
• Adult child who provided care to Medicaid recipient at least 2 years prior to admission to institution and provided care, deferring entrance to medical institution.

The state may also waive recovery in case it is proven that the surviving relatives will incur undue hardship. In New York, undue hardship may exist when the estate asset subject to recovery is the sole income-producing asset of the beneficiaries, such as a family farm or family business, and income produced by the asset is limited; the estate asset subject to recovery is a home of modest value (i.e., with a value no higher than 50 percent of the average selling price in the county where the home is located, as of the date of the recipient’s death) and the home is the primary residence of the beneficiary; or there are other compelling circumstances.

Undue hardship will not be found to exist: (a) based solely on the inability of any of the beneficiaries to maintain a pre-existing lifestyle; or (b) if the alleged hardship is the result of Medicaid or estate planning methods involving divestiture of assets.

Thus, the state may waive recovery from some estate assets but may still decide to pursue recover against other assets of the Medicaid recipient. In New York, recovery is made only against the Medicaid recipient’s probate estate (property passing through will or intestacy).

Medicaid liens can be complex. If you discover that your property or property that you are inheriting is subject to a Medicaid lien or if a Medicaid lien is just about to be recorded, you need to consult with a Medicaid lawyer immediately to see whether you can dissolve or object to the recording of the lien. Should you need assistance on Medicaid liens, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].