Jun 28

State Can Apply Means Test to Estate Seeking Hardship Waiver from Medicaid Estate Recovery


Patricia Bacon received long-term care Medicaid benefits before she died. After her death, the state sought to recover the amount it paid Ms. Bacon in Medicaid benefits. Ms. Bacon's estate sought a hardship waiver, which the state denied.

The estate appealed to court, and the trial court reversed the state's decision, ruling that the hardship definition in the state Medicaid plan exceeds state law because it includes a means test for the beneficiary. Michigan state law authorizing the state to seek approval for its Medicaid plan provides that the definition of hardship must include an exemption for the value of the Medicaid recipient’s home that is equal to or less than 50 percent of the average price of a home in the county in which the Medicaid recipient lives. The state Medicaid plan further requires the state to apply a means test to anyone seeking a waiver. The state appealed.

The Michigan Court of Appeals reverses, holding that the state can include a means test as part of the hardship waiver. Citing Ketchum v. Department of Health and Human Services (Mich. Ct. App., No. 324741, March 1, 2016) and In re Estate of Klein (Mich. Ct. App., No. 329715, July 19, 2016), the court rules that state law includes provisions allowing the state plan to include other requirements for the hardship exemption.

For the full text of this decision, go to: http://publicdocs.courts.mi.gov/OPINIONS/FINAL/COA/20170601_C330260_57_330260.OPN.PDF