Federal and state law requires the Minnesota Department of Human Services (DHS) and county agencies to recover costs that the MA program pays for its members under certain circumstances. DHS and counties collect these costs in two ways: (1) estate recovery and (2) liens.

The 2016 Minnesota Legislature changed MA estate recovery and liens law. View this chart to see whether you are affected by the law change.

Explore the topics below to learn more about estate recovery, liens, the 2016 law change, and estate-planning resources. Or review Medical Assistance Estate Recovery and Liens (DHS-7273) for a basic overview with examples and explanations.

Estate recovery

Liens

The 2016 law change

Getting advice about how to plan for MA estate recovery and liens

Estate recovery

What is an estate?

An estate is the property that a person leaves behind after dying.

 What is estate recovery?

Estate recovery is a law that requires Minnesota counties to make claims against the estates of certain deceased MA members, or the estates of the deceased members’ surviving spouses, to recover the amount MA paid for certain health care services.
Estate recovery occurs only after an MA member dies. Counties cannot collect from an MA member’s assets for repayment of MA while the member is alive.

Whom does estate recovery apply to?

Estate recovery applies to members who receive certain MA services at 55 years old or older.
An MA member who received any MA services at 55 years old or older before January 1, 2014, is subject to an estate claim for the cost of those services after he or she dies.

An MA member who received long-term services and supports (LTSS) at 55 years old or older on or after January 1, 2014, is subject to an estate claim for the cost of those services after he or she dies.

Age when you received services Services received before January 1, 2014 Services received on or after January 1, 2014
Under 55 years old No costs can be recovered. No costs can be recovered.
55 years old or older Cost of all MA services can be recovered. Cost of only LTSS can be recovered.

 

Why is there a difference in recovery for services before and after January 1, 2014?

The 2016 Minnesota Legislature amended the law about estate recovery. This amendment changed the MA services for which counties can recover costs for January 1, 2014, onward.

What are long-term services and supports (LTSS)?

For the purpose of MA estate recovery, LTSS are the following:

  • Nursing home services
  • Home and community-based services
  • Related hospital and prescription drug costs

If an MA member receives these services at 55 years old or older, the cost of the services can be recovered from the member’s estate after he or she dies.

Home and community-based services are a range of services that include the following:

“Related hospital and prescription drug costs” are the costs for any hospital and prescription drug services MA provides to an MA member during the same time he or she received nursing home services or home and community-based services.

When does estate recovery happen?

Generally, estate recovery happens after an MA member dies.
But counties delay recovery if the deceased MA member is survived by a spouse or has a child who is under 21 years old, blind or permanently disabled.

Once a deceased MA member’s surviving spouse dies, counties are required to recover MA costs from the spouse’s estate. But recovery can be further delayed if a child who is under 21 years old, blind or permanently disabled is still living in the home when the surviving spouse dies.

Can estate recovery happen before an MA member dies?

No. Estate recovery happens only after an MA member dies.

How does estate recovery happen?

Generally, counties make an MA estate claim when the property of a deceased person is being distributed after death. Sometimes this happens in a court setting, but sometimes it does not. Methods of distributing property include probate, special administration, decrees of descent, affidavits of collection of personal property and transfer-on-death deeds.

Why can a county recover from the estate of a spouse who survived an MA member?

Federal and state law require counties to try to recover from the estate of a surviving spouse.

This requirement comes out of a protection for the surviving spouse of a deceased MA member. When an MA member dies, counties cannot collect on an estate claim if a spouse survives the deceased MA member. If the surviving spouse receives assets from the deceased MA member’s estate, the surviving spouse can use the assets without having to repay MA for the deceased member’s health insurance costs while the surviving spouse is still alive.
Once the surviving spouse dies, though, a county can file an estate claim against the surviving spouse’s estate to repay the MA program.

Do the children of an MA member have to pay back what MA paid for their parent’s care?

No. An MA member’s children do not have to use their own assets to reimburse the state for any MA services the member received. Counties that collect on an MA estate claim do so with priority over distributions to heirs. This means that MA should be repaid before heirs receive assets from the estate. Repayment of MA ensures that future MA members receive health care services.

Liens

What is a lien?

A lien is a legal right or interest that a person or entity has in another person’s property until the creditor’s claim has been repaid or the lien expires.

DHS files liens against real property interests to recover the amount that MA paid for certain services described in state and federal law.

What is real property?

Real property is a specific type of property that includes land and buildings on land. DHS files liens against real property only to recover certain costs that MA paid.

Whom do liens for MA repayment apply to?

Liens for MA repayment apply to two main populations of MA members.
First, liens may apply to members who permanently reside in a medical institution. For this situation, DHS may file a lien called an “MA lien.”

Second, liens apply to MA members who receive services that can be recovered in an estate claim. These are members who received any MA services at 55 years old or older before January 1, 2014, and members who received long-term services and supports (LTSS) at 55 years old or older on or after January 1, 2014. For this situation, DHS files a lien called a “notice of potential claim” (NPC).

What types of liens does DHS file?

DHS files two types of liens to secure repayment of MA: MA liens and notices of potential claim (NPCs). MA liens and NPCs have different impacts on MA members and their estates.

MA liens

An MA lien is a lien filed against an MA member’s real property interest before the member dies to secure repayment of MA costs of the member’s permanent stay in a medical institution. The lien allows DHS to collect on the MA lien when real property is sold, which may happen before or after the member dies.

DHS files MA liens only after a member enters a “medical institution,” and a physician certifies that the member will never return to the home.  Medical institutions include the following:

Nursing facilities
Skilled nursing facilities
Intermediate care facilities
Intermediate care facilities for people with developmental disabilities

An MA lien is enforceable for 10 years from the date of its filing. DHS may renew the lien for another 10 years.

NPCs

An NPC is a lien filed against a member’s real property interest to secure repayment of MA costs subject to estate recovery. DHS can file an NPC before, or within one year after, an MA member’s death.

An NPC is not a lien until the member dies. Until the member dies, the NPC serves only as notice that an MA estate claim could be made against a specific interest in real property in the future.

NPCs are enforceable for 20 years from the date of filing, or from the date of the member’s death, whichever is later.

Can DHS collect on a lien before an MA member dies?

Yes, DHS can collect on an MA lien before a member dies, but only for an MA member permanently residing in a medical institution.

Even if an MA member is permanently residing in a medical institution, the law prohibits DHS from filing a lien against the member’s real property in certain situations. For example, DHS cannot file a lien against the member’s real property if the property is the home of the member’s spouse. Also, DHS cannot file a lien if a child who is under 21 years old, blind or permanently disabled lives in the home.

Does DHS file liens against estates?

No. Because a deceased person’s estate can include many assets that are not real property, DHS does not file liens against a person’s “estate.” DHS files liens only against real property that may or may not be included in a person’s estate.

The 2016 law change

What did the law change do?

It reduced the number of MA services for which costs can be recovered in an estate claim or under a notice of potential claim (NPC) for January 1, 2014, onward. The law change affects the primary population of MA members affected by estate recovery: MA members who received services at 55 years old or older.

This reduction in the number of services subject to recovery is a change because, since the beginning of Minnesota’s MA estate recovery program in 1967, estate claims have been filed for the costs paid for all MA services an MA member received during the applicable recovery period.

Now, starting with services received on and after January 1, 2014, DHS and county agencies will recover only the amount MA paid for long-term services and supports (LTSS) that an MA member received at 55 years old or older.

DHS and county agencies will still recover the amount MA paid for all services a member received at 55 years old or older before January 1, 2014.

Did the law change “get rid of” estate recovery and liens?

No. It reduced the number of services for which costs can be recovered in an estate claim or notice of potential claim (NPC) starting January 1, 2014.

As a consequence of this law change, however, people who began receiving MA services other than long-term services and supports (LTSS) at 55 years old or older on or after January 1, 2014, are no longer subject to estate recovery and liens, unless they receive LTSS in the future or permanently reside in a medical institution.

Did DHS notify affected MA members about the law change?

Yes. DHS mailed a notice to any household in which a person received MA services other than long-term services and supports (LTSS) on or after January 1, 2014. This is approximately 816,000 households.

Which government health insurance programs and services are affected by the law change? Does the law change affect only certain members within a program?The law change affects only one health insurance program, Medical Assistance (MA). The chart below shows which MA members and services are affected by the law change.

Effects of the 2016 law change 
Population Affected by the law change? Can the costs of MA services be recovered? Services for which costs can be recovered by estate
claim or lien after January 1, 2014
Medical Assistance (MA) member under 55 years old, not permanently residing in a medial institution No No None
MA member permanently residing in a medical institution at any age No Yes, if DHS has filed an MA lien All MA services
MA member 55 years old or older Yes Sometimes
MA member 55 or older receiving waiver HCBS Yes Yes
  • Waiver HCBS
  • Nonwaiver HCBS
  • NFS
  • For members receiving NFS or HCBS: related hospital and prescription drug services
People enrolled in both Medicare and MA (including waiver HCBS) Yes Yes
  • Waiver HCBS
  • Nonwaiver HCBS
  • NFS
  • For members receiving NFS or HCBS: related hospital and prescription drug services
People enrolled MA only for help with  Medicare costs No No None
MinnesotaCare No No None
People enrolled in MinnesotaCare as a basic health program (BHP) No No None
People who received subsidies for private insurance purchased on MNsure (advanced premium tax credits) No No None

Getting advice about how to plan for MA estate recovery and liens

Can DHS or county agencies answer an MA member’s question about estate planning?

No. DHS and county agencies cannot answer “What if…?” questions about possible estate recovery or liens. DHS and counties are government agencies whose role prohibits them from giving legal advice to the public. Answering questions about how hypothetical future events may affect estate recovery or liens is legal advice.

Who can answer an MA member’s questions about estate planning?

Private attorneys and legal aid attorneys can answer questions about estate planning.

This article was copied from a government document.