Medicaid Estate Recovery in Vermont

Who is subject to recovery

Medicaid Covered Services Rule 7108.3 seeks recovery from the estates of individuals who died on or after January 1, 1994 and were 55 or older when they received Medicaid-paid long-term care services.¹

What is recovered

Rule 7108.3 recovers the cost of nursing facility services, home- and community-based waiver services, and related hospital and prescription drug services, including amounts held in personal needs accounts.¹

When recovery is deferred or barred

Under Rule 7108.3, recovery is deferred while a surviving spouse is living, or while there is a surviving child under 21 or a blind or permanently and totally disabled child of any age.¹

Exemptions and protected assets

33 V.S.A. § 1906a bars recovery against a homestead passing to a lineal heir or sibling whose income is below 300 percent of the federal poverty level, or who contributed significantly (monetarily or otherwise) to letting the decedent delay or avoid nursing home placement.²

Rule 7108.3.2 exempts a homestead worth less than $250,000 that passes to a sibling or lineal heir with gross family income below 300 percent of the federal poverty level, or who provided significant services or financial support that let the decedent avoid or delay long-term care by at least six months.¹

Where the homestead exceeds $250,000, Rule 7108.3.2 exempts the first $250,000 of fair market value and the excess equity remains subject to recovery.¹

Undue-hardship waiver

At any time before the probate estate closes, an heir may assert that recovery against the homestead would be an undue hardship. Rule 7108.3.2 exempts the home when a sibling lived there continuously for at least one year immediately before the decedent began long-term care.¹

Rule 7108.3.2 also exempts the home when a son or daughter lived there continuously for at least two years immediately before the decedent began long-term care and provided care that allowed the decedent to remain at home.¹

DVHA's Estate Recovery procedure answers a denied exemption request with a denial letter with rights to appeal.³

Governing law: 33 V.S.A. § 1906a; 42 U.S.C. § 1396p

An heir's assertion that recovery against the homestead would be an undue hardship

at any time before the probate estate closes¹

1. 1.Vermont Medicaid Covered Services Rules 7108.3 (Estate Recovery) and 7108.3.2 (Hardship Exemptions for Homesteads)
2. 2.33 V.S.A. § 1906a, Recovery against estate; homestead exemptions
3. 3.DVHA Estate Recovery SOP (issued 09/21/2023)
4. 4.Estate Recovery forms (Department of Vermont Health Access)