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LB 641

Change provisions relating to medicaid estate recovery

109th Legislature (2025-2026) Introduced by Eliot Bostar

LB 641 broadens protections for family caregivers by limiting Medicaid estate recovery, requires physician attestations for caregiver-based exceptions, and allows life estates to b

Approved by Governor on May 20, 2025
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Bill Summary · LB 641

Summary — LB 641 (2025)

Title: Change provisions relating to Medicaid estate recovery
Introduced by: Sen. Eliot Bostar (29)
Status: Enacted — Approved by Governor May 20, 2025

LB 641 modifies Nebraska’s Medicaid estate recovery statute (section 68-919) to broaden protections for family caregivers who live with and provide care to Medicaid recipients, clarify documentation standards, and adjust how certain property interests (particularly life estates) are treated for recovery of Medicaid payments.

Purpose / Intent

According to the introducer’s statement, the bill “protects the financial interests of caregivers who share a residence with a family member in need of care.” It aims to limit when the Department of Health and Human Services (DHHS) may foreclose on liens or recover Medicaid costs from the estates of institutionalized recipients, and to make physician attestation an acceptable form of documentation for caregiver-based exceptions.

Key provisions and changes

  • Expanded definition of “medical institution”: explicitly includes assisted living facilities (in addition to nursing facilities, intermediate care facilities for persons with developmental disabilities, and inpatient hospitals).
  • Timing and recovery of debt:
    • A Medicaid recipient is indebted to DHHS for total Medicaid paid on their behalf if aged 55+ or if institutionalized and could not reasonably be expected to return home.
    • The debt accrues during life but recovery is postponed until after the recipient’s death and after the death of any surviving spouse, and only if the recipient left no child who is under 21 or blind/permanently disabled (SSI criteria).
    • Debt includes total Medicaid paid (no interest).
  • Protections against foreclosure of a lien on the recipient’s home:
    • DHHS shall not foreclose if a sibling with an equity interest lawfully resided in the home for at least one year prior to admission and continuously since, or
    • While an adult child lived in the home for at least two years immediately before institutionalization and can establish they provided care that delayed admission. The statute now expressly provides that such care may be reimbursed or unreimbursed.
    • A written attestation by a physician stating a sibling or adult child provided care that delayed admission is sufficient documentation for DHHS to avoid foreclosure.
  • Life estate exclusion:
    • Adds a pathway to exclude a life estate from the recipient’s estate for recovery if, within 12 months after recording a deed retaining a life estate, a “relative” (in earlier drafts defined broadly) resided solely and continuously with the recipient and provided care that delayed admission. A physician’s written attestation is sufficient documentation to exclude the life estate. (Note: committee amendments narrowed documentation language to require physician attestation specifically for sibling/adult child exceptions; the enacted text includes the 12‑month life estate exclusion with physician attestation.)
  • Administrative provisions: reinforces DHHS’s duty to pursue reasonable, cost-effective recovery and to certify (upon application) whether reimbursement is due.

Who is affected

  • Medicaid recipients (particularly those aged 55+ or institutionalized) and their estates.
  • Family caregivers (siblings, adult children, and other relatives who may qualify under the life‑estate exclusion in some drafts) who live with recipients; these caregivers gain stronger protection from foreclosure or estate recovery in certain circumstances.
  • Department of Health and Human Services (administration, documentation review, recovery processes).
  • Personal representatives and heirs involved in probate when DHHS seeks recovery.

Procedural history / timeline

  • Introduced: January 22, 2025
  • Judiciary Committee hearing: March 6, 2025 (advanced with amendments AM538; AM672 later adopted)
  • Adopted amendments on Judiciary and on floor (AM538, AM672)
  • Passed Final Reading: May 14, 2025 (49–0–0)
  • Presented to Governor: May 14, 2025
  • Approved by Governor: May 20, 2025 (became law)

Fiscal impact

Fiscal notes were filed (March 5 and May 8, 2025). The slip law and provided materials do not state a specific dollar amount in the summary documents; see DHHS or the Legislature’s fiscal office for the full fiscal note text.

For questions about how the law will be applied in specific estate or probate situations, interested parties should consult legal counsel or DHHS guidance once implementing regulations or procedures are published.

Compiled from official sources — confirm details with the bill’s official record.

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