Can Medicaid place a lien on the house even if you didn’t go to the nursing home? Yes!

In a seemingly hopeful article, entitled “How States Are Helping People Get Medicaid At Home,” Forbes magazine details several innovative programs which states around the nation are establishing to assist elders to stay at home instead of entering the nursing home.

“There’s a lot of innovation going on, but it can be a little dizzying in some respects,” said Cindy Mann, a partner at Manatt Health who worked on the report. “We wanted to present options that states might consider.” Currently — and this may surprise you — more Medicaid money for long-term care services and supports is spent on home- and community-based services than in nursing facilities. That’s a welcome change. In 1995, only 18% of Medicaid long-term care spending supported home- and community-based services; today, 55% does.

This sounds great, right? I mean, most every one of my clients want to stay away from the nursing home.

Survey after survey shows that people want to continue living in their homes as they age, rather than moving to a nursing home or an assisted living facility. (In a recent Nationwide Insurance survey of Americans 50 and older, 61% said they’d rather die than live in a nursing home.) But whether you or your parents will be able to receive long-term care benefits at home through Medicaid — assuming Medicaid-eligibility — is an open question.

So why am I poo-pooing this article? Because the article completely ignores the fact: many fear the nursing home because of fear Medicaid will take their home and life savings. These innovative programs still expose these elders’ estates to Medicaid reimbursement.  Under a 1993 federal statute, states must recover money spent on behalf of individuals who were age 55 or older when they received Medicaid specifically for nursing facility services, but also home- and community-based services provided under a Medicaid waiver, and related hospital and prescription drug services. Accordingly for the Medicaid programs discussed in the article, state law still requires estate recovery; Medicaid will be reimbursed.

I am not saying do not employ these programs; just act with full knowledge. Imagine the surprise of one of my clients when she received a demand for reimbursement from Medicaid; she was emphatic that she had never been in a nursing home. Upon further inquiry, we learned that she had received in-home services under a Medicaid-waiver program.

On average, per-beneficiary, per-month expenditures declined by $1,840 (23%) among older adults transitioning from nursing homes through state pilots of the Money Follows the Person Rebalancing Demonstration program. Translation: average cost savings for Medicaid and Medicare programs of $22,080 per beneficiary during the first year after the transition. By the end of 2015, states had transitioned 63,337 Medicaid beneficiaries from long-term institutional care to community-based care.

Texas’ pilot Money Follows the Person program resulted in 68% of participants remaining in the community, saving $24.5 million in Medicaid funds.

The overall Money Follows the Person program, the HHS report added, “provides strong evidence of success at improving the quality of life of participants.” These people experienced “the highest levels of satisfaction with their living arrangements” and nearly all liked where they lived one year after community living — a 32 percentage point increase compared to when they were in institutional care. Their care didn’t suffer, either, after leaving the nursing homes, the HHS report noted.

Accordingly, staying at home is much cheaper than entering the nursing home (approximately 1/3 cheaper), but Medicaid will still seek recovery and reimbursement of all that’s been paid.

TO SUMMARIZE: the Alabama Medicaid Agency has elected to seek estate recovery for all Medicaid costs for all Medicaid beneficiaries for services received after age 55 including the estates of individuals who never received Medicaid nursing home benefits pursuant to 42 U.S.C. § 1396p(b)(1)(B)(1)(ii).