11 Things for Farming Elders — and their Beneficiaries — to Know About Medicaid Liens

America's farmers are getting older, which¹ is hardly news, but the long-running decline over several decades in farmland ownership matters to farmers of every age, agricultural lawyers warn.

Hishaw, a former USDA adjudicator who founded Family Agriculture Resource Management Services (F.A.R.M.S.), a national nonprofit offering technical and legal help to older small farmers, argues that families need to understand how Medicaid liens and estate recovery affect long-term care and the protection of older farmers' assets, well before care is needed.

Don't Bet the Farm on Medicaid, by Jillian Hishaw, Esq.

With the average age of U.S. farmers still rising, farmers' need for aging services is growing and often ignored. Most people over 65 rely on Medicaid for long-term care coverage, but protecting property in order to qualify is often left until care is urgently needed. Farmers are often land rich and cash poor, and keeping family land should not have to compete with getting care. The book explains Medicaid in general and how it affects small farmers, especially Medicaid liens and estate recovery.

In her practice, Hishaw has seen many farm clients lose land to Medicaid claims, which led her to write Don't Bet the Farm on Medicaid, now in its third edition. It explains what a Medicaid lien is, how to avoid one, and reviews the laws of about 20 states for state-specific exemptions.

Here is a general overview of the basics. Rules differ by state, so talk with an elder law or agricultural attorney about your own situation.

1. Medicaid is a joint federal and state program that helps pay for care for people with low income and limited assets, including older and disabled people. Farmers who may need long-term care should do their estate planning well prior applying for Medicaid, so that land is protected as far as the law allows.
2. State Medicaid programs can place liens on a recipient's property in some cases and, after the recipient dies, are required to seek repayment of certain long-term care costs from the estate (estate recovery). As more farmers leave the land for nursing care, these claims can lead to the loss of family farmland.
3. Nursing home care is very expensive (one national survey put the 2016 median at roughly $7,700 a month), far beyond what most farm families can pay.²
4. USDA Economic Research Service figures show that close to half of U.S. farms bring in less than $10,000 a year.³
5. For Medicaid recipients 55 and older, states must try to recover long-term care costs from the estate after death, and that can include farmland.
6. Before applying for Medicaid, landowners may want to get legal advice on whether and how to transfer ownership to family members, since transfers can affect eligibility.
7. Assets given away or sold for less than fair value within 5 years (60 months) before applying can delay Medicaid coverage.
8. This 5-year look-back means a transfer made inside that window can trigger a penalty period during which Medicaid won't pay for long-term care. The length of the penalty depends on the value transferred and your state's average monthly cost of nursing care, not simply on waiting out the five years. You also still have to meet your state's income and asset limits.
9. Receiving Medicaid doesn't necessarily mean leaving the farm; many states offer home- and community-based care so you can stay at home.
10. Some families use a life estate deed, transferring the land while keeping the right to live on it.
11. With a life estate, you keep the right to live on and use the property for the rest of your life; how it is treated by Medicaid and estate recovery varies by state, so get legal advice before using one.

Through her work helping landowners keep their land with estate planning and other protections, and teaching young people about the value of small farms, Hishaw works to keep farmland available for the next generation.

Read more about her work at jillianhishaw.com. Learn about F.A.R.M.S. at 30000acres.org.