Overview of CMS Guidance: Application of Estate Recovery and Other §1917 Provisions to MAGI Individuals

Executive Summary

On February 21st, 2014, the Centers for Medicare & Medicaid Services (CMS) released a State Medicaid Directors Letter (SMDL) addressing the application of liens, adjustments and recoveries, transfer-of-assets rules, and post-eligibility income rules to individuals eligible for Medicaid under Modified Adjusted Gross Income (MAGI) eligibility rules.  MAGI rules apply to the Medicaid adult expansion population, and this much-awaited federal guidance addresses the issue of whether Medicaid estate recovery applies to this group. According to the guidance estate recovery does apply to some individuals age 55 and older whose eligibility is determined using MAGI methodologies, including the expansion population. CMS, however, recognizes the law is a potential barrier to enrollment and intends to explore options to eliminate recovery of Medicaid benefits for items or services other than long-term care and related services for MAGI beneficiaries. In the meantime, CMS reminds states that they have the option to limit recovery to what is federally required. 

Washington, DC Office
1444 I Street NW, Suite 1105
Washington, DC 20005
ph: (202) 289-7661
fx: (202) 289-7724

Los Angeles Office
3701 Wilshire Blvd, Suite #750
Los Angeles, CA 90010
ph: (310) 204-6010
fx: (213) 368-0774

North Carolina Office
101 East Weaver Street, Suite G-7
Carrboro, NC 27510
ph: (919) 968-6308
fx: (919) 968-8855