Most people think they’re exempt from the estate tax (often called the “death tax”) because they don’t have $2 million. A lot of people with low incomes do have some assets, however, and if they have used any Medicaid benefits, their heirs may be in for a shock.
Depending on state law, the state may have the right to everything, up to the cost of Medicaid benefits received — house, car, bank accounts, tools, annuities, piano, furniture, everything — and not just 50 percent of it.
This situation is not exactly new. The Omnibus Reconciliation Act of 1993 requires states to pursue Medicaid asset recovery from persons who receive benefits at age 55 or older. At first, this applied mainly to nursing home benefits, but at state option, it could now include any items or services provided under Medicaid.
ORIENT: Medicaid as a tax on the ‘estates’ of the poor – Washington Times