Mississippi Medicaid and Probate

Medicaid is a Federal government program that is administered by state agencies. It provides for payment of medical expenses for persons age 65 or older or individuals that are disabled in accordance with Social Security disability definitions.  To qualify, applicants must fit within certain asset and income limitations.

Mississippi law implements the Federal policy of allowing the state to seek recovery from the Mississippi probate assets of some decedents.  It requires the executor or administrator of a Mississippi estate to notify the Division of Medicaid of the pendency of a probate proceeding involving the assets of a deceased recipient who was fifty-five (55) years of age or older when he or she received assistance.  The notification law ensures that the state will have the opportunity to submit a claim and gives Medicaid the authority to seek recovery for payment of certain benefits.

This enforcement mechanism is authorized by Federal law.  The Omnibus Budget Reconciliation Act of 1993 requires states to seek recovery of nursing home services, home and community-based services, and related hospital and prescription drug services from the estate of a deceased Medicaid recipient who was fifty-five years of age or older when the assistance was received.  This allows the state to seek reimbursement from a deceased person’s assets for Medicaid benefits received during the person’s lifetime.

Mississippi has implemented an estate recovery program in accordance with Federal requirements.  The Mississippi recovery statute provides:

1. The division shall be noticed as an identified creditor against the estate of any deceased Medicaid recipient …
2. In accordance with applicable federal law and rules and regulations, including those under Title XIX of the federal Social Security Act, the division may seek recovery of payments for nursing facility services, home- and community-based services and related hospital and prescription drug services from the estate of a deceased Medicaid recipient who was fifty-five (55) years of age or older when he or she received the assistance. The claim shall be waived by the division (a) if there is a spouse; or (b) if there is a surviving dependent who is under the age of twenty-one (21) years or who is blind or disabled; or (c) as provided by federal law and regulation, if it is determined by the division or by court order that there is undue hardship.

While Federal law clearly allows Medicaid to seek recovery against an estate, it is not always clear what property is included in an “estate.”  The Federal Omnibus Budget Reconciliation Act of 1993 defines an “estate” to include “all real and person property and other assets included within with the individual’s estate, as defined for purposes of State probate law …”  This means that the Federal definition of “estate” will piggyback on the state definition.

Since each state has the leeway to alter the definition of “estate” as it sees fit, there is some variation in how the term is defined under each state’s law.  The State Medicaid Manual, which is published by the U.S. Department of Health and Human Services, requires states to make a decision.  Specifically, states must decide on a definition of “estate” that will apply for Medicaid recovery purposes. States are also allowed to place liens against assets, even before the Medicaid recipient dies.

Some states have implemented broad definitions of “estate” for Medicaid recovery purposes, pulling in such assets as living trusts, jointly-titled assets, life insurance proceeds, and other assets that have traditionally considered to be “non-probate” assets. But Mississippi has taken a more conservative approach, limiting estate recovery to assets that are included in the Mississippi probate estate.  As noted above, the Mississippi statute does not expand the definition of “estate” beyond the traditional probate estate.  As a result, Medicaid must look only to the assets that pass through the decedent’s Mississippi probate estate.