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W. Va. Loses Latest Round in Effort to Block Estate Recovery

  • May 28th, 2002

A federal appeals court has said that the federal government may force West Virginia to recover money it spends on Medicaid recipients' nursing home care from the recipients' estates'”a process called 'estate recovery.'

Congress enacted the estate recovery law in 1993. The law states that following the death of the Medicaid recipient a state must attempt to recover from his or her estate whatever benefits it paid for the recipient's care. However, no recovery can take place until the death of the recipient's spouse, or as long as there is a child of the deceased who is under 21 or who is blind or disabled.

West Virginia was unwilling to implement this politically unpopular law, saying it would recover very little money and hit the poorest elderly the hardest. A house is usually the only asset that is available to recover from, since the Medicaid recipient has either transferred or spent most other assets. Lower-income families that don't shelter their assets pay most of the actual estate recoveries, West Virginia officials say, noting that the average collection is a mere $14,000.

When the U.S. Department of Health and Human Services (HHS) threatened to take away some of all of West Virginia's Medicaid funding if it failed to begin going after Medicaid recipients' estates, the West Virginia legislature enacted the law but also instructed the state attorney general to sue HHS. The attorney general did so, arguing that the government's estate recovery requirement is unconstitutional because it coerces the states to do something they wouldn't otherwise do.

The state's suit has not fared well thus far. A U.S. district court ruled that the government's action was constitutional and the U.S. Court of Appeals for the Fourth Circuit agreed. (See West Virginia v. U. S. Dept. of Health and Human Services, U.S. Ct. App., 4th Cir., No. 01-1443, May 7, 2002.) However, West Virginia attorney general Darrell McGraw has vowed to take the matter to the U.S. Supreme Court.

Not all states have implemented the estate recovery law. Officials in Michigan, Georgia and Texas told USA Today that they have no plans to begin collecting from the estates of deceased Medicaid recipients, and Florida has the law on the books but the state doesn't enforce it because it violates the state constitution, which shields homes from creditors. West Virginia officials are unsure why they have been singled out by HHS.

In the meantime, West Virginia's governor is seeking an amendment to the law that would exempt estates valued at less than $50,000 from estate recovery.

For more on estate recovery, click here.

Local Elder Law Attorneys in Ashburn, VA

John Laster

Law Offices of John L. Laster
Falls Church, VA

Judith Mitnick

Needham Mitnick & Pollack, PLC
Falls Church, VA

Mindy Felinton

Felinton Elder Law & Estate Planning Centers
Rockville, MD


Last Modified: 05/28/2002

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