Medicaid Loopholes

By: Michelle Rosel
By: Michelle Rosel

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Many seniors feel reassured knowing that Medicaid will be there to help them with medical costs. Many people don't realize that the government considers Medicaid benefits a loan. Eventually they will ask for their money back.

Almost a hundred years ago, Fred Phillippe's grandfather built a home in Riverside. It was his father's dying wish that Fred and his wife live in that home. When his father passed away, Medicaid immediately informed Fred they were taking the house. Three years later a judge ruled that Fred could keep his father's home.

Under federal law Medicaid is encouraged to get back some of the money it gives out by taking the estates of deceased recipients. Only those with a surviving spouse or dependants are exempt. Kansas Medicaid has already taken $25 million from recipients after their deaths.

Attorney Kate Hutchinson specializes in Medicaid and estate planning. She says there are loopholes in the system to keep you exempt from paying. She says you should start making gifts of property to your children and list them as joint tenants of your house. Hutchinson says you can transfer your assets out of your name before you need Medicaid, but not after.

Medicaid recovers less than one percent of what it spends providing medical assistance to Kansans every year. Many states are more aggressive in the estate recovery process than Kansas. Some refuse to collect at all.

For more information on the estate recovery program, contact your local SRS worker. If you need legal help with estate planning, the Wichita bar association has a lawyer referral service.

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