Understanding Medicaid Estate Recovery: The Experience of North Carolina and Policy Implications for Future Reforms

To estimate the prevalence of Medicaid estate recovery in North Carolina.

We descriptively analyzed the number of estates, amount recovered, and hardship waiver applications using North Carolina public records data.

The data contained information on the number of estates and amount recovered through Medicaid estate recovery between 2017 and 2021 (n = 2975). Additionally, we analyzed hardship waiver application data for residents who applied and had their application processed between 2018 and 2021 (n = 301).

We found approximately $83 billion was recovered from beneficiaries between 2017 and 2021, or 0.6% of the total cost of North Carolina's annual Medicaid program and just 0.9% of the fee-for-service annual long-term services and supports Medicaid budget. We found that Black homeowners were more likely to have lower value estates recovered, and overall, more money was recovered from white estates.

While states hope Medicaid estate recovery may balance Medicaid spending through increased revenue, our findings demonstrate that these efforts may be insufficient. Policymakers should opt for strategies outside of the Medicaid program that can more precisely target high-net-worth individuals instead of policies like estate recovery that disproportionately impact low-income families.