Pennsylvania MERP Program: How Medicaid Estate Recovery Works

When a Pennsylvania resident who received Medicaid long-term care benefits dies, the state has a legal right to recover those costs from their estate. The program — formally called the Medical Assistance Estate Recovery Program, or MERP — is operated by the Department of Human Services and targets probate assets left behind by deceased recipients who were 55 or older when benefits were received.

The amounts at stake are substantial. Nursing home care in Pennsylvania averages $10,000–$14,000 per month. A three-year stay can produce a state claim exceeding $400,000 against a modest estate.

What MERP Can and Cannot Recover

MERP's reach is limited to probate property — assets that pass through the estate because they're titled solely in the decedent's name with no beneficiary designation or survivorship feature.

This includes:

• A home owned solely by the decedent
• Bank accounts in the decedent's name alone
• Personal property and vehicles titled individually

MERP cannot recover from:

• Property held in joint tenancy with right of survivorship (passes directly to the survivor)
• Property held as tenancy by the entireties with a spouse
• Life insurance with a named beneficiary (not the estate)
• Retirement accounts with a named beneficiary
• Assets in an irrevocable trust established before the lookback period

The distinction between probate and non-probate property is the single most important factor in Medicaid estate planning. How assets are titled determines whether the state can touch them.

The Executor's Legal Obligation

Pennsylvania places a strict duty on executors. If the decedent was 55 or older and may have received Medical Assistance benefits in the five years before death, the executor must send a certified written notice to the DHS Division of Third Party Liability requesting a Statement of Claim.

This isn't optional. An executor who distributes estate assets to heirs without checking for a Medicaid claim becomes personally liable for the outstanding amount — up to the full value of the distributed assets.

The 45-Day Forfeiture Rule

Once DHS receives a properly formatted notice, it has exactly 45 days to respond with a Statement of Claim. If DHS fails to respond within that window, the claim is legally forfeited and the executor can distribute the estate free of the Medicaid lien.

This timeline makes proper notice formatting critical. The notice must include the decedent's name, date of death, Social Security number, and the estimated gross value of the estate. Send it by certified mail with return receipt.

Hardship Waivers

Three hardship exceptions can reduce or eliminate a MERP claim:

1. Small estate waiver: If the gross estate value is $2,400 or less, recovery is waived entirely
2. Caregiver child exception: If an adult child lived in the decedent's home and provided care that delayed nursing home admission for at least two years before institutionalization, the home is exempt from recovery
3. Sibling equity exception: If a sibling with a documented equity interest in the home resided there for at least one year before the decedent's institutionalization

Additionally, if enforcing recovery would reduce a household's income below 250% of the Federal Poverty Guidelines and the asset is an income-producing property (working farm, small business), the estate can petition for an undue hardship waiver.

How MERP Connects to Advance Planning

Medicaid estate recovery is one of the strongest arguments for early healthcare and estate planning. Documenting your wishes with a Pennsylvania Advance Directive is the first step — it clarifies who makes medical decisions and creates the framework for coordinating asset titling, beneficiary designations, and probate avoidance strategies before a long-term care event occurs.

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