States gain on Medicaid estate recovery

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Medicaid estate recovery amounts are increasing at a modest rate, according to a new AARP study, which offers best practice recommendations to states on the federally mandated program.

Nationwide, states recovered $411 million in fiscal year 2005. That is $81 million more than in FY 2003, according to the study. States recovered an average of $8 million in 2005, compared with $6.5 million in FY 2003. Nonetheless, the impact on state budgets is still slight at this point, the report said. Medicaid estate recovery attempts to recover Medicaid's expenditures for long-term care from the estates of deceased Medicaid beneficiaries.

States could do a better job of notifying family members and Medicaid beneficiaries about the recovery process, according to AARP Public Policy Director John Rother. They also should have fair rules on hardship waivers and alternatives such as installment payments, he added.

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