Medicaid Estate Recovery in Colorado

What is recovered

For recipients 55 or older when assistance was received, Rule 8.063.11 recovers nursing facility services, home and community-based services, and related hospital and prescription drug services. Colorado does not make the broader optional recoveries federal law permits for this group.¹

For recipients who were institutionalized when they received medical assistance, Rule 8.063.11 recovers all medical assistance paid on their behalf.¹

Who is subject to recovery

Recipients age 55 or older when they received medical assistance, and recipients who were institutionalized at the time they received medical assistance.¹

When recovery is deferred or barred

Under Rule 8.063.15, the Department does not recover from the estate if there is a surviving spouse of the recipient, a child of the recipient under age 21, or a blind or disabled dependent of the recipient.¹

Exemptions and protected assets

Rule 8.063.16 bars recovery from the sale of the recipient's home where a sibling lawfully resided there for at least one year immediately before the recipient was admitted to the institution and has continuously lived in the home since.¹

The same bar applies where a son or daughter lawfully resided in the home for at least two years immediately before that admission, provided care that let the recipient live at home rather than in an institution, and has continuously lived there since. The Department may still recover from other assets in the estate.¹

When the state does not pursue a claim

Under Rule 8.063.12, the Department may limit recovery to cases that are cost-effective, where the medical assistance likely to be recovered is greater than the likely cost of the recovery.¹

Undue-hardship waiver

Colo. Rev. Stat. 25.5-4-302(4) lets the Department compromise, settle, or waive recovery upon good cause shown. Colorado's rule uses good cause, not undue hardship, as the standard.²

Rule 8.063.18 defines good cause: the heirs would become eligible for assistance without the estate proceeds; the inheritance would let the heirs discontinue assistance; or the home is part of a business, including a working farm or ranch, and recovery would cost the heirs their means of livelihood.¹

Governing law: Colo. Rev. Stat. 25.5-4-302; 10 CCR 2505-10, Section 8.063

1. 1.10 CCR 2505-10, Section 8.000 (Section 8.063, Estate Recovery)
2. 2.Colo. Rev. Stat. Title 25.5 (2024), including 25.5-4-302