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Medicaid estate recovery: will they take the house?

One of the most feared and least understood parts of Medicaid: after a recipient dies, states are required to try to recover what Medicaid spent on their care — often by placing a claim against the estate, including the home. Understanding the rules removes a lot of the fear. It should not remove all of it, because two of the most important pieces are decided by your state, not by federal law.

What it is

Federal law requires Medicaid Estate Recovery against the estate of someone who was 55 or older when they received the assistance. After death, the state seeks repayment from the deceased’s estate. The home is usually the main asset at stake — which is why the family home, exempt while you’re alive, can be exposed after death.

“Only long-term care” is the floor, not the ceiling

We used to say federal law requires recovery for people 55+ “who received long-term-care benefits,” which reads as though long-term care is the boundary of what can be taken back. That is the mandatory minimum described as though it were the maximum, and for some families it is exactly backwards. We had it wrong and we are fixing it in place rather than quietly.

The statute sets a floor every state must reach, and then hands each state an option to go much further. Recovery from the 55-and-over group is required, “but only for medical assistance consisting of—”

Read clause (ii) slowly, because it is doing a lot of work. In a state that has taken that option, recovery is not limited to the nursing home. It reaches any service the Medicaid plan paid for after the person turned 55 — doctor visits, hospital stays, prescriptions, ordinary care that had nothing to do with long-term care and that nobody in the family ever thought of as “the Medicaid that will come back.” A person who never spent a day in a facility can still leave an estate claim behind them.

The carve-out is worth knowing too, because it is one of the few flat protections here: even in an opt-in state, benefits under the Medicare Savings Programs — the programs that pay Medicare premiums and cost-sharing for people with low income — are outside recovery. That exclusion is in the statute itself, not up to the state.

So “did they get long-term care?” is the wrong question for figuring out exposure. The right one is: “Does this state recover only for long-term-care services, or has it taken the option to recover for any service the plan paid after 55?” Ask your state Medicaid agency or an elder-law attorney. As with the estate definition below, we are not publishing a fifty-one-state table of who took the option, for the same reason: we would be restating other people’s compilations rather than reading each state’s own law, and a wrong cell in that table tells a family they are safe when they are not. We would rather send you to someone who has to be right.

Two independent state choices sit on this page, and it is worth seeing that they multiply rather than sit side by side. Clause (b)(1)(B)(ii) decides which spending can be recovered; clause (b)(4) — the estate definition below — decides which property it can be recovered from. A state that has taken both options recovers for every service it ever paid, out of assets that never touch probate. A state that took neither recovers long-term-care costs from the probate estate alone. Same federal statute, same facts, and the distance between those two outcomes is most of what a family has. Both questions have real answers and neither is answered by this page.

When the home is protected

Recovery is deferred or barred in important cases, and the federal bar — § 1396p(b)(2), the clause that actually governs recovery — is worth reading exactly, because it is wider than families expect in one place and narrower in another.

Recovery may be made only after the death of a surviving spouse, and only at a time when there is no surviving child who is under 21, blind, or permanently and totally disabled (42 U.S.C. § 1396p(b)(2)(A) ↗). Note what that clause does not say: it does not require the child to live in the home, or nearby, or anywhere in particular. A disabled adult child living in another state, who has never set foot in the house, bars recovery just as completely as one living in it — and there is no age limit on the blind-or-disabled branch. This page used to say “while a child under 21 or a disabled child lives there,” which invented a residency test federal law does not impose, and would have told exactly the wrong family that they had no protection.

The caregiver child and the resident sibling are the narrower half, and this is the part most often stated too broadly. § 1396p(b)(2)(B) does protect them — but it opens “in the case of a lien on an individual’s home under subsection (a)(1)(B),” so on its own terms it blocks a lien, not recovery from a probate estate. Where a caregiver child is actually protected from recovery, it is usually a state’s own rule or the undue-hardship waiver doing the work, not federal command — which is why it is worth asking your state rather than assuming. (One drafting detail, since it cuts the family's way: the sibling in (b)(2)(B)(i) needs one year of residence and, unlike the lien and transfer clauses below, no equity interest at all.)

Finally, every state must have a process to waive recovery for undue hardship — the statute directs the agency to establish one, so it is a right to ask, not a favor (§ 1396p(b)(3)(A) ↗).

“Deferred” and “barred” are not the same word

This is the distinction families most often miss, and it is expensive. Barred means the claim is extinguished — it is gone. Deferred means it is only postponed: the state steps back while a protected person is living, and the claim is still there when they stop being protected. In most states the surviving-spouse protection is a deferral, not a forgiveness. The house is not safe forever; it is safe for now.

So when a widow is told “they can’t touch the house while you’re alive,’’ that is true and it is not the whole sentence. When she dies, the claim can come back and reach the home she has just left to her children — which is exactly the moment the family assumed was settled. Read “protected” as “protected while,” ask your state which of the two its protection is, and do the planning during the deferral rather than treating it as the end of the story. The community spouse’s death is what typically re-opens the question.

The caregiver-child exception has two hard requirements

“A child who lived there and cared for the parent” is the loose version, and it is why families think they qualify when they don’t. The exception is narrow and it is tested on facts:

Both, not either. If this is your situation, it is worth real money and it is worth documenting as it happens — dates, what care you provided, the parent’s condition — because proving it years later from memory is how the exception gets lost. Ask an elder-law attorney in your state how yours applies it; the same words are read differently in different places.

A different rule, easily mistaken for the one above. Everything that follows is the transfer-penalty exception at § 1396p(c) — it governs whether giving the house away during life creates a penalty, not whether the state can recover from the estate afterwards. The two are separate mechanisms and a family can clear one and lose the other. The two-year caregiver-child test is federal, and it is worth reading in its own words: the child must have been “residing in such individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility” (42 U.S.C. § 1396p(c)(2)(A)(iv) ↗). Note the phrase as determined by the State — that is where the argument happens. The sibling-with-equity protection runs on the parallel test at one year, in the clause right above it: a sibling “who has an equity interest in such home and who was residing in such individual’s home for a period of at least one year immediately before the date the individual becomes an institutionalized individual” (§ 1396p(c)(2)(A)(iii)). The same one-year sibling test also blocks a lien under § 1396p(a)(2)(C) — a different mechanism from the transfer rule, and worth not confusing.

What counts as the “estate” — the question the whole thing turns on

“Can they take the house?” almost always resolves into one narrower question: what does your state count as the estate? Federal law gives states a choice, and the two answers lead to very different outcomes for the same family.

Read those two lists against each other and you can see why this is the crux. The exact devices families use to keep a house out of recovery — the life estate, the joint deed, the TOD deed — work in a probate-only state and can be reached in an expanded-estate state. Same deed, same intention, opposite result, decided entirely by which side of a state line your parent lives on. A strategy copied from a relative in another state, or from a website that doesn’t say which kind of state it’s describing, is a coin flip.

Roughly half the states use the expanded definition, though counts differ depending on who is doing the counting and how partial adoptions are treated — several states expand in some directions and not others, which is why a simple national list would mislead more than it helps. We are not going to guess yours. Ask an elder-law attorney in your state, or your state Medicaid agency, one specific question: “Does this state recover only from the probate estate, or does it use an expanded estate definition?” It is a question with a real answer, they will know it, and it determines whether everything else you’re considering works.

Five states, read from their own sources

We can’t hand you a table of all fifty-one, and the section below explains why we won’t fake one. But the question is answerable one state at a time, out of that state’s own material, and it is worth seeing five real answers — because what they show is that the tidy two-box version above is the beginning of the analysis, not the end of it.

Now look at what those five do to the binary. Ohio and Minnesota are clean examples of the expanded rule. California is probate-only but only since 2017. Michigan is probate-only except for the very families most likely to have planned. And New York is probate-only for reasons you can only discover by reading a one-paragraph notice that contradicts the regulation it refers to. Every one of those qualifications is the kind of thing a national Yes/Limited table erases. That is not a reason to skip the question. It is the reason to ask it about your own state, out loud, of somebody who has to be right.

A note on method, because it matters here more than usual. The five above were read in July 2026 from each state’s own statute or agency page, linked so you can check us. We did not take them from the compilations that most search results are quietly restating. Where a state’s codified regulation and its current published guidance disagree — New York being the live example — the agency’s current guidance is what its caseworkers apply, and that is what we followed. These rules change: California’s changed in 2017, New York’s in 2011, and yours can change next year.

And the honest limit: our state pages carry an estate-recovery Yes/Limited field, and that field does not record which of the two definitions a state uses — so don’t read “Limited” as “probate-only.” It isn’t reliable for that, and we’d rather say so than let you infer it. We have the scope rule for five states because we read five states; we are not going to publish the other forty-six until we have done the same work on each, because a wrong entry in a table like that doesn’t make someone mildly misinformed — it tells them a deed is safe when it isn’t. Until then, for any state not listed above, this is a question to put to a person. The statutory framework is 42 U.S.C. § 1396p(b) ↗.

Planning around it

Legitimate strategies exist — certain irrevocable trusts, timely transfers made well before the look-back window opens, and life estates — but they’re technical and easy to get wrong. Check your state’s window before you count backwards from five years: most states look back 60 months, but California uses 30 (and excludes gifts made during 2024–2025). Your state page shows the window that applies to you. This is squarely elder-law-attorney territory; the fee is usually small next to a home. Don’t rely on last-minute moves.

This guide is general information, not medical, legal, or financial advice. Rules vary by state and change over time. For personalized, unbiased help, your Area Agency on Aging and your state’s Long-Term Care Ombudsman are free.