Repayment of Medicaid under Iowa's Estate Recovery Law


General. Iowa’s Estate Recovery Law requires the state to be reimbursed from the estate of a person who has received benefits under certain Medicaid (Title 19) 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 types of Medicaid benefits, including benefits to pay for the cost of nursing homes and medical benefits under the Medicaid program, the Qualified Medicare Beneficiary program, the Medically Needy program, and the Elderly Waiver program.


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, 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.

Exceptions. Certain gifts and transfers of assets during your life are not included as assets at your death subject to the Estate Recovery Law. For example:

  1. Assets that you give to your spouse and to your children who are totally disabled.
  2. Your home if you transfer it to a child who lives with and cares for you in the home for at least two (2) years and if the care keeps you from having to go to a nursing facility.

Other kinds of gifts may be subject to the Estate Recovery Law and limit eligibility for future Medicaid benefits. For example, a gift made within five years (three years if prior to February 8, 2006) of needing Medicaid can make you ineligible. The Department of Human Services (DHS) may also make a claim against the person you make certain kinds of gifts to if you make the gift within five years of the time that you apply for Medicaid. With certain exceptions, giving assets away is generally NOT permissible if you are receiving Medicaid benefits.

Other. When you or your spouse are admitted to a nursing home or begin receiving Elderly Waiver services, you should immediately apply for Medicaid benefits to pay for the long-term care so that DHS will determine the amount of assets that are assigned to each spouse. (In many cases, you can keep more of your assets if you appeal the initial DHS assignment decision.  All assets assigned to the spouse not needing long-term care (the “community spouse”) must be transferred to the community spouse so that the spouse needing long-term care will remain eligible for Medicaid benefits. Exempt assets, like your home and car, should also be transferred. Transfers of exempt assets will ensure that the assets will be available to the community spouse. The community spouse should also revise his or her will so that if he or she dies before the Medicaid recipient, Medicaid eligibility would not be 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. 

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: Jun 25, 2019

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