When a Medicaid recipient dies, the state can recover the money that it spent on the Aid to the Aged, Blind or Disabled (AABD) program for the recipient. States are required by federal law to recover long-term care costs. There are two ways that Medicaid may recover from recipients: 

Claims

Medicaid may file a claim against the probate estate of a deceased recipient. In particular, Medicaid may file a claim against the beneficiary's estate for the value of the medical assistance provided to them after they reached age 55. The state cannot, however, recover from the estate of a deceased Medicaid recipient when the recipient has a surviving, spouse, child under age 21, or blind or disabled child of any age. 

Liens

Medicaid may place a lien on any real estate owned by a recipient during the recipient's lifetime. However, the state cannot impose a lien on real estate when any of the following individuals resides in the home:

• The spouse; 
• Child under age 21; 
• Blind or disabled child of any age, or;
• Sibling with an equity interest in the home, or;
• Child caregiver who meet certain requirements.

You can ask for a waiver of this lien if it will mean that a family member will suffer financial hardship.