Repayment of Medicaid under Iowa's Estate Recovery Law

Authored By: Legal Hotline for Older Iowans

General:  Iowa’s Estate Recovery law requires the State of Iowa to be reimbursed from the estate of a person who has received benefits under certain Medicaid programs.  It applies to some people under the age of 55 who are residents of long-term care facilities.  It also applies to people who are 55 years of age or older who receive certain other types of Medicaid benefits, including the Elderly Waiver and other Medicaid waiver programs, the Medically Needy program, the Iowa Health and Wellness program (and its predecessor program IowaCare). 


Your estate includes any property you own at your death, including real estate, bank accounts, excess funds in a burial trust, and interests in trusts.  The Estate Recovery law also applies to property you own as joint tenants with another person, life estates and annuities.  The law does not apply to proceeds of life insurance policies that are paid to someone other than your estate. 


The Estate Recovery law allows certain expenses to be paid.  Assets can be used to pay the cost of administering your estate, reasonable funeral and burial expenses, reasonable and necessary medical expenses of your last illness, and taxes having preference over other debts.  Remaining assets must be used to reimburse the state for expenses paid by Medicaid.


Waiver and Deferral:   Repayment of Medicaid benefits is waived if repayment would reduce the amount received from your estate by a surviving spouse, or by a surviving child who is under age 21, blind, or permanently and totally disabled at the time of your death. If repayment is waived because of a surviving spouse or child who is blind or disabled, then repayment of the Medicaid benefits is due at the time of the death of the spouse or child, to the extent that the spouse or child inherited assets from you.  Repayment can also be waived if it would cause an undue hardship because of limited income and assets.


In a married couple where only one spouse is on Medicaid, Estate Recovery often can be avoided by making sure all assets in the name of the spouse receiving Medicaid are transferred into the name of the community spouse.  These transfers should include the transfer of exempt assets, like your home and car, so that the Medicaid recipient does not own anything at death. The community spouse should also revise his or her will so that if he or she dies before the Medicaid recipient, Medicaid eligibility would be less affected. Finally, since a person receiving Medicaid benefits is required to claim a portion of his or her spouse’s estate if the spouse dies, the community spouse may want to put assets in a trust or in investments that are not affected by this requirement, such as life insurance and investment accounts that have beneficiaries. 


The executor or the personal representative of the Medicaid recipient, and the administrator of a nursing facility or other long-term care facility, are required to report the death of a Medicaid recipient to the DHS within ten days of the date of death.  The personal representative or executor of the recipient’s estate will have personal liability for the Medicaid debt if funds that are subject to being repaid to the state for Medicaid are instead disbursed in some other manner.

The rules for qualifying for Medicaid are often complex and confusing. You may call the Legal Hotline for Older Iowans at 1-800-992-8161 if you have questions or would like more information about Medicaid eligibility.




Iowa Legal Aid provides help to low-income Iowans. 

To apply for help from Iowa Legal Aid:

  • Call 800-532-1275. 
  • Iowans age 60 and over, call 800-992-8161.
  • Apply online at

If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer”   A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.

*As you read this information, remember this article is not a substitute for legal advice.


Last Review and Update: Mar 08, 2023
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