After the death of a person who has received Title XIX funded medical assistance, the law requires that the individual's assets be used to provide repayment to the Iowa Department of Health and Human Services. Title XIX funded medical assistance includes Medicaid and various waiver programs, including the Medically Needy Program and the Elderly Waiver Program.

Federal law requires states to have an estate recovery program. In Iowa the estate recovery program is provided under Iowa Code Section 249A.53(2).

Administrative rules are found in section 441 IAC 75.28(7).

Estate recovery affects recipients of Title XIX funded medical assistance who are:

• 55 years of age or older at the time they receive medical assistance, or
• Under the age of 55 and a resident of a care facility who cannot reasonably expect to return home.

Yes, but the debt is only waived to the extent that collection of the debt will reduce the amount received by the following persons:

• If there is a surviving spouse,
• Or if there is a child of the recipient who has a disability or is blind, or is under the age of 21,
• Or if collection of the debt would cause undue hardship.

If the debt is waived for a surviving spouse or a disabled child, the repayment is due at the time of that person's death, to the extent that he or she had inherited from the medical assistance recipient.

If the debt is waived because there is a child of the recipient under the age of 21, the debt is due at the time he or she reaches the age of 21 to the extent that he or she had inherited from the medical assistance recipient.

If the debt is waived for an undue hardship, the debt is due to the extent that the person received assets of the estate, when the person no longer meets the hardship waiver criteria, or at the time of the person's death.

Under Iowa Code Chapter 523A.303, the seller of a burial contract (the funeral director or banker) is required to contact the Estate Recovery Program when there are funds remaining in a medical assistance recipient's non-guaranteed irrevocable burial trust fund after the funeral and burial expenses have been paid. The Estate Recovery Program then has sixty days in which to inform the seller if those funds are to be paid to the Iowa Department of Health and Human Services or if they may be paid to the next of kin. If an estate is open in probate, the excess burial trust funds are to be paid to the estate.

Proceeds from life insurance policies are generally considered the assets of the named beneficiaries. However, proceeds are considered recoverable after higher priority expenses are paid: 1) when a policy on the deceased had a cash value that was not reported to the Department and would have made the deceased ineligible, 2) when life insurance is the funding source for a burial trust fund for the deceased, or 3) when the deceased was a beneficiary of a policy on another person, who died prior to the deceased.

Most Medicaid recipients do not have a Medical Assistance Income Trust (Miller Trust) or a Special Needs Trust. Where there are such trusts, they are not part of the estate and must not be used to pay estate expenses. Residual funds from such trusts are received by the Estate Recovery Program and must be made payable to the Iowa Department of Health and Human Services, according to the terms of the trust and Iowa Code Chapter 633C.

For more information about Miller Trusts, which are also known as Medical Assistance Income Trusts: Iowa Medicaid Trusts

Annuities are subject to Estate Recovery to the extent the decedent had an interest in the annuity at the time of death. An annuity is an investment and is not treated like life insurance. Remaining payments must be considered an asset of the estate for estate recovery purposes.