AARP protests state filing liens on property of Medicaid recipients

The Nevada Supreme Court was asked Monday to stop the state from putting liens on homes of people who receive Medicaid benefits when their spouses are still alive and living there.

Medicaid provides long-term care for people who can't afford it themselves and, while they are alive, allows them to keep their family home. But federal law also allows the government to recover those expenditures after the individual dies.

And if the home is jointly owned by a couple, the surviving spouse can continue to live there until death.

But to protect its interests in recovering Medicaid money, the state has a policy of placing a lien on the family home while the remaining spouse is alive and residing there.

Clark County District Judge Ron Parraguirre enjoined the state from filing such liens last year, agreeing it violated explicit requirements of federal law permitting recovery of Medicaid funds only after the death of the surviving spouse.

The state appealed and Deputy Attorney General Chuck Hilsabeck argued Monday the lien isn't taking anyone's property -- it only protects the state's interest. He told the court it specifically prevents the surviving spouse from giving the property to children or other family members, preventing the state from recovering any of what Medicaid spent.

He said if the surviving spouse must to sell the home for his or her own financial needs, the state has "routinely" released the liens and will continue to do so.

AARP lawyer Rochelle Bobroff said that may be so, but it's not in statute, not in regulation and most seniors in that situation don't know that. She said the liens have a serious effect on any attempt to sell the property to raise funds for the surviving spouse's needs because the lien "clouds" the title to the property.

"A lien is a taking of a present interest in property rights," she said.

Justice Mark Gibbons said he too was concerned about the "chilling effect."

"I could see where buyers walk away from the deal rather than deal with the cloud."

Hilsabeck said the state is developing regulations that spell out its existing policies so there won't be a problem in the future.

Bobroff said she wants the court to order the state to stop filing the liens. She said there are other methods of protecting its interest in repayment for Medicaid costs.

But Justice Bill Maupin questioned whether the court should have the case at this point. He said the issues haven't been fully resolved by the district court, including AARP's attempt to make it a class action.

"To reach the merits we first have to determine that we have jurisdiction," he said.

Justice Nancy Becker said the process of converting the case into a class action wasn't completed, so any decision the court made at this point might apply only to Agnes Ullmer and Michael Parco -- the two surviving spouses who suddenly found liens against their homes.

The court took the case under submission.