by Kristen Ishihara and Chris Parker with Ishihara & Parker Law Firm PLLC

Today, we’re diving into the Medicaid Estate Recovery Program (MERP)—a critical topic for families with loved ones receiving Texas Medicaid.

If this applies to you, watch the full video Below to understand how MERP works, and don’t forget to like, subscribe, and turn on notifications on our YouTube channel for more guidance on protecting your loved ones and their assets.

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What Is MERP?

MERP is Texas’s process for recovering Medicaid funds spent on long-term care from a recipient’s estate after their passing. This typically applies when a loved one has been in a skilled nursing facility or receiving long-term care under Medicaid.

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How It Works:

1. Medicaid Covers Costs: Medicaid pays for care, often thousands of dollars per month, while the recipient contributes their income (e.g., Social Security).
2. Recovery After Death: When the recipient passes, the state seeks to recoup those costs from the estate, often starting with the home or other assets.

What to Expect After a Loved One’s Death

If your loved one was on Medicaid, you’ll likely receive two letters from the state:

1. Notice of Intent to File a Claim: This letter informs you that Medicaid intends to recover funds from the estate.
2. Claim Letter with Amount Owed: This includes a detailed breakdown of costs Medicaid covered, which can be significant—sometimes hundreds of thousands of dollars.

These letters require action, not avoidance. Responding promptly can make a big difference in how the claim is handled.

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Steps to Protect Assets from MERP

Planning ahead while your loved one is alive is key. Here’s how you can safeguard their assets:

1. ‍The Home
   • Use a Lady Bird Deed: This legal document ensures the property passes directly to heirs without going through probate, protecting it from a MERP claim. It can be done even after the recipient qualifies for Medicaid but must be completed before their death
2. Life Insurance
   • Ensure it has a named beneficiary. Life insurance proceeds with a direct beneficiary bypass probate and avoid MERP claims.
3. Bank Account
   • Add Payable on Death (POD) or co-owners to bank accounts. This ensures funds transfer directly to beneficiaries and are excluded from probate.
4. Retirement Accounts
   • Name beneficiaries for IRAs and other accounts to prevent them from being included in the estate.
5. Vehicles
   • Add a beneficiary designation to car titles to simplify the transfer process and avoid probate.

After Receiving a MERP Claim

If a loved one has already passed without planning, don’t panic—there are still steps you can take:

1. Respond to the Letters: Inform Medicaid if there are no probate assets or provide documentation for any exceptions.
2. Understand Exceptions:
   • Surviving spouse: Medicaid waives claims entirely.
   • Low-value estate: Claims are often waived if the estate’s value is under $10,000.
   • Child caregiver: If an unmarried adult child lived with the recipient for at least a year before Medicaid, the home may be exempt.
3. Hire an Attorney: A lawyer can navigate timelines and challenge claims, potentially protecting remaining assets.

Why Planning Matters

Proactively addressing Medicaid eligibility and asset protection can save your family stress, time, and money. Planning ensures that your loved one’s care is covered while preserving their legacy for future generations.

Watch, Subscribe, and Stay Informed

We hope this guide to MERP helps you feel more confident about navigating the process. For a deeper dive, watch the full video above, and don’t forget to like, subscribe, and turn on notifications on our YouTube channel for more essential insights.

At Ishihara & Parker Law Firm PLLC, we’re here to help you protect your loved ones and their assets. Call us at (903) 555-1234 or contact us below to discuss your family’s needs.

Together, we’ll make sure your family is prepared and protected!

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