Medicaid Estate Recovery in Alabama

What is recovered

The Agency recovers all approved Medicaid medical assistance except Medicare cost-sharing (42 U.S.C. 1396a(a)(10)(E)).¹

Who is subject to recovery

Recipients age 55 or older when assistance was received, and recipients permanently institutionalized at any age.¹

When recovery is deferred or barred

Recovery is deferred while a surviving spouse is living, and while there is a surviving child under 21 or a blind or permanently and totally disabled child of any age.¹

Undue-hardship waiver

An undue-hardship waiver is available for an income-limited family farm or business that is the sole income-producing asset of heirs. It is not available where long-term care insurance applied or assets were illegally divested to avoid recovery.¹

Rule 560-X-33-.05(2)(c)(iii) requires each heir with an interest in the estate to apply for a separate undue-hardship waiver.^{2, 3}

A waiver application must be requested within 30 days of receiving the Agency's notice against the estate, or upon the sale, transfer, or conveyance of real property subject to a TEFRA lien.⁴

How the state files its claim

Section 43-2-697 requires the personal representative, or the person filing a small estate case, to give notice of the estate to the Alabama Medicaid Agency by certified mail, return receipt requested, and to file an affidavit of that mailing with the probate court.⁵

The Agency responds with a claim, a waiver of claim, or a statement that no amount is due within 30 days of receiving the notice, or the claim is waived. No sixth-preference debt is paid and nothing is distributed until proof of the notice is filed in the probate court and those 30 days have passed.⁵

Governing law: Ala. Admin. Code r. 560-X-33-.05; Code of Ala. 1975, §§ 22-1-11, 22-6-8, 43-2-697

Request for an undue-hardship waiver application

within 30 days of receipt of the Agency's notice, or a sale of real property under a TEFRA lien⁴

The Agency's response to the estate notice

within 30 days of the Agency's receipt of the notice; the claim is waived⁵

Wait before paying sixth-preference debts or making any distribution

within 30 days of the Agency's receipt of the notice, once proof of notice is filed⁵

Probate court

Receives the affidavit of mailing and the Agency's response to the estate notice⁵

1. 1.Estate Recovery (Alabama Medicaid Agency)
2. 2.Ala. Admin. Code ch. 560-X-33, Recoupments and Liens (Alabama Medicaid Agency publication, 1-25-16)
3. 3.Ala. Admin. Code r. 560-X-33-.05
4. 4.Estate Recovery Q&A (Alabama Medicaid Agency, 12-22-23)
5. 5.Code of Ala. 1975 § 43-2-697