Texas Medicaid Estate Recovery: What Executors Should Know

Start with three questions

MERP does not apply to every Medicaid recipient or every asset. Begin with the basic facts before you try to calculate what the estate may owe.

• Did the person receive covered Medicaid long-term services and supports at age 55 or older after applying for those services on or after March 1, 2005?
• Did the person leave property that must pass through probate?
• Is there a surviving spouse, a child under 21, a blind or permanently disabled child, or another exception that may prevent recovery?

Which Medicaid services can lead to a claim?

Texas can seek repayment for nursing-facility care, certain home and community-based programs, and related hospital and prescription-drug costs. Primary Home Care is excluded under the current Texas HHS guide.

The state can recover only the amount it paid for covered services, and never more than the value available in the estate. Compare the service dates and claim amount in the MERP notice with the Medicaid and care records you have. Ask the MERP contractor to explain any date or charge you cannot match.

Which property is part of the MERP estate?

Texas MERP generally reaches property that is subject to probate. A home, vehicle, bank account, or other asset owned in the deceased person's name may be included if it passes through the probate estate.

Some assets pass directly to another person and usually stay outside the probate estate. Texas HHS gives examples such as life insurance and retirement accounts with named beneficiaries, payable-on-death accounts, and joint accounts with a right of survivorship.

The account title, deed, and beneficiary form matter more than the family's informal understanding. Make a list of each asset and record exactly how it is titled and who is named to receive it.

When Texas will not pursue recovery

Texas HHS lists several situations in which it will not seek payment from the estate. Check these before agreeing to a claim.

• A spouse of the Medicaid recipient is still living.
• A surviving child is under 21, blind, or permanently and totally disabled under Social Security rules.
• An unmarried adult child lived full time in the recipient's home for at least one year before the recipient died.
• The estate is worth $10,000 or less under the current HHS guide.
• The recoverable Medicaid cost is $3,000 or less under the current HHS guide.
• Selling the property would cost more than the property is worth.

What to do when the notice arrives

Save the notice and envelope. The notice should include questions for the estate representative and information about requesting an undue-hardship waiver. A waiver application must reach MERP with its supporting documents within 60 calendar days of the date on the Notice of Intent to File a Claim.

Before you answer, gather the will, probate filings, property deeds, account statements, beneficiary forms, tax-appraisal records, and receipts for estate expenses. Then work through the notice in this order:

• Confirm the Medicaid service dates and the amount claimed.
• Identify every person who may trigger an exception or qualify for a hardship waiver.
• Separate probate assets from assets that pass directly to a beneficiary or surviving owner.
• Gather proof of funeral costs, legal fees, mortgages, and other estate debts.
• Keep copies of everything you send and record the date it was submitted.

Do not distribute the home or other probate property until you know how the MERP notice will be resolved.

Hardship waivers and expense deductions

An heir or a person named in the will may request a hardship waiver. Texas may grant one when estate property is a family business, farm, or ranch that provides at least half of an heir's livelihood; when recovery would cause an heir to need public assistance; or when other compelling circumstances are documented.

A separate homestead hardship may protect up to $100,000 of the home's value for qualifying siblings or direct descendants whose gross family income is below 300 percent of the federal poverty guidelines. The income limits change, so use the figures and instructions that apply to the notice you received.

The claim may also be reduced for reasonable home-maintenance costs paid while the Medicaid recipient was in a nursing facility, or for care that helped the person remain at home longer. Receipts, canceled checks, invoices, tax bills, and bank records are the proof Texas asks for.

Where MERP falls among estate debts

Texas classifies a MERP claim as a Class 7 estate claim. Funeral expenses, administration costs, secured debts, and other claims listed earlier in the Texas Estates Code may be paid first. MERP does not place a lien on the deceased person's property, according to the Texas HHS FAQ.

Priority can become complicated when the estate has limited cash or a house must be sold. A Texas probate lawyer should review a disputed claim, a hardship request, or any proposed distribution that could leave the estate unable to pay higher-priority debts.

The proposed 2026 increases are not yet the current rule

In March 2026, Texas HHSC proposed raising three MERP thresholds. A June notice described a related State Plan amendment with a proposed July 2 effective date. The HHS public guide still lists the current amounts below, and the Texas Register continues to identify the rule amendments as proposed as of July 18, 2026.

If your notice may be affected by the proposal, ask MERP or a Texas probate lawyer which amounts apply to that estate.

Keep one clear MERP file

A good MERP file contains the notice, proof of the submission date, the probate inventory, title and beneficiary records, the appraisal, Medicaid service records, and every receipt offered as a deduction. Legacywyse can help you keep the estate's assets, debts, documents, and expenses together while you work through the Texas estate process. Bring that file to a Texas probate lawyer when the claim, an exception, or a hardship request is unclear.