San Antonio Express-News
July 29, 2003

Medicaid Estate Recovery Regulations

copyright 2003, Paul Premack

The Texas legislature and Governor Perry have indeed passed an "estate recovery" law that could put the homes of Medicaid recipients at risk. The provision was hidden in a very lengthy bill that did not come right out and say that homesteads would be put at risk. Rather, the bill dealt with reorganization of various state agencies, and had one section that referred to federal estate recovery law and instructed the Texas Commissioner of Health & Human Services to comply with it. The law requires that any funds collected by the estate recovery program go into additional Medicaid services for the elderly instead of the state’s general fund.

The Commissioner is beginning the process of writing regulations pursuant to the federal law. The regulations do not yet exist. We know that some situations will be exempt from estate recovery (for instance when a surviving spouse occupies the homestead). Other situations depend on the final form of the Texas regulations. They could be written in a severe manner, threatening the low asset, low-income elderly with the loss of otherwise protected resources. Or they might be written in a mild manner, continuing the Texas tradition of homestead protection as much as possible under the federal mandate.

The point is that we do not yet know what is going to happen. We do not know if your mother's house will be at risk or not. It is too early to tell.

Instead of being quietly frustrated, there are a few things that you can do. First, you can immediately contact your legislators to request that they pass HB 28, which would repeal the new estate recovery law. Repeal may have little chance of success, since the state could lose federal dollars if it does not comply.

If repeal fails, then in a few months you will have an opportunity to make comments on the draft proposed regulations. The Commissioner will have to publish them in the Texas Register - which you can track online at http://www.sos.state.tx.us/texreg/index.html. They will most likely schedule one or more public hearings, and you could sign up to make comments.

After considering the public's input, the Commissioner will finalize the regulations. Again, it is not possible to know exactly when that will happen, but a good guess is early 2004. They must then be submitted for approval by the federal Center for Medicaid Services. Only after all those steps are taken will Texas actually begin an estate recovery program.

At that point, the regulations can be thoroughly analyzed. Legal strategies can be devised that will apply to individual situations. Only then will we know the extent of the risk to your mother's home.