Medicaid Liens: How to Protect Your House

Reviewed by Denise Lettau, J.D., wealth management specialist Attorney Denise Lettau has over 15 years of experience in the wealth management industry.

A beloved family home can be something that you want to protect for the next generation. When considering Medicaid, many seniors are unaware that a Medicaid lien may be placed on their house. Learning about what a lien is and how Medicaid works can help you develop a plan to protect what is likely one of your most sentimental assets.

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Key Takeaways

1. States can impose Medicaid liens in certain circumstances. Enrollees cannot typically opt out of a lien.
2. State Medicaid programs may or may not use liens in recovery efforts. Policies on liens differ between states.
3. There are exceptions and waivers to Medicaid liens. These may vary from state to state, too.
4. Strategies to protect your house from Medicaid liens should be personalized. It’s a good idea to consult with an elder law attorney in your state to receive advice specific to your situation.

What is a Mediciad lien?

A Medicaid lien is a type of property lien. You can think of a lien as a way for a creditor, in this case your state’s Medicaid program , to claim a legal right to an interest in a property owned by a Medicaid recipient. [ 01 ]

Why does Medicaid use liens?

State Medicaid programs are generally required to recover money spent on certain Medicaid benefits. [ 02 ] It’s common for State Medicaid programs to attempt to recoup the amount paid for nursing home care on behalf of a recipient by placing a Medicaid lien. When the property with the lien is sold, Medicaid will recover the money it spent on that individual’s nursing home expenses. [ 01 ]

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Can Medicaid put a lien on your house?

Yes – Medicaid can put a lien on your house under certain circumstances. These circumstances may include the following: [ 02 ]

• Medicaid benefits being incorrectly paid (pursuant to a court judgment)
• A Medicaid enrollee is permanently institutionalized

However, there are exceptions. Medicaid cannot typically place a lien under the second circumstance if the following is true about the house: [ 02 ]

• The spouse of the enrollee resides in the home
• A child under 21 resides in the home
• A child with blindness or disabilities resides in the home
• A sibling has an equity interest in the property

Do you have a choice to opt out of a Medicaid lien?

No, you can’t opt out of a Medicaid lien. However, some states may offer a procedure to request a waiver if certain conditions – usually hardship-based qualifications – are met.

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How to protect assets from Medicaid recovery Medicaid liens

Unfortunately, there is not one specific way to protect assets from a Medicaid lien. It’s important to note that although Medicaid is a federal law, each state implements it differently.

Medicaid offices generally cannot provide advice on how to protect assets from Medicaid liens. You should consider speaking to an elder law attorney about your unique situation, and ask them about Medicaid eligibility, applications, estate recovery, and Medicaid’s look-back period in your state. You can find an elder law attorney through the National Academy of Elder Law Attorneys’ Find a Lawyer search tool .

With options varying significantly from state to state, there are a myriad of issues to address with almost any strategy that you choose to pursue. This is why it is critical to work with a trusted elder law attorney to develop the best strategy for your individual situation.

Note: A previous version of this article was heavily based upon an interview with Stuart Furman, an elder law attorney in California for more than 30 years, and author of the “ElderCare Ready Book.” Furman’s interview inspired content in the 2023 version of this article, as well.