For many families in Temple and across Central Texas, Medicaid helps cover nursing home care and other long-term services. Most recipients do not realize the state may seek reimbursement from a deceased recipient’s estate under the Medicaid Estate Recovery Program (MERP). Knowing how MERP works – and when it does not apply – may help protect what families inherit.
How the Medicaid Estate Recovery Program operates
MERP is administered by Texas HHS and generally applies to Medicaid long-term care recipients who were age 55 or older when they received those services and who received benefits on or after March 1, 2005. When a recipient dies, the state sends a notice to heirs or the estate representative. MERP only applies to the probate estate, and the state may only recover what it actually paid. Pay-on-death bank accounts and life insurance with named beneficiaries are not at risk.
When MERP does not apply: Exemptions and hardship waivers
Certain situations may block or waive a MERP claim. Heirs and estate representatives typically have a limited window – often 60 days – to respond to the notice and affirmatively assert the applicable exemption or hardship waiver. Missing that deadline may result in a claim proceeding by default.
Recovery is typically not pursued when, at the time of the recipient’s death:
- A surviving spouse is living
- A surviving child under 21 years old is living
- A surviving child of any age who is blind or permanently disabled is living
- The total estate value or the total amount Medicaid paid falls below the state’s minimum recovery threshold
Heirs facing financial hardship may request a waiver. Qualifying situations include a working farm or business providing their primary income, a home falling within state value and income limits, or an unmarried adult child who provided care that the state determined delayed facility placement.
How to keep assets outside the probate estate
Because MERP is limited to the probate estate, certain tools may help property pass directly to heirs without going through probate. Lady Bird deeds, transfer-on-death deeds and revocable living trusts are among those options – keeping assets outside MERP’s reach. These tools work best when put in place early in the Medicaid planning process.
For families navigating MERP, the most important steps are knowing which exemptions apply, responding to any notice on time and putting the right legal tools in place before a claim arises.
