Hospital Stay Is 'Institutionalization' Required by Caretaker Child Exemption Statute

Ruling on a Medicaid estate recovery case, a Minnesota appeals court finds that a woman's brief hospitalization is an institutionalization as required in the state's caretaker child homestead exemption statute. In re the Estate of Borg (Minn. Ct. App., No. A06-1037, July 17, 2007).

Bertha Borg needed assistance to stay in her home. Her daughter moved in to care for her, and Ms. Borg received additional assistance at home through a Medicaid program. In 2004, Ms. Borg was admitted to the hospital and died five days later.

The county filed a claim against the estate seeking to recover Medicaid benefits. Ms. Borg's only asset was her house, and her daughter disallowed the claim, arguing the house was protected by the caregiver child homestead exemption. Under state law, the county could not recover medical assistance payments from a homestead if the recipient's child acted as caregiver and lived in the house for at least two years before the parent's "institutionalization." The statute also states that if, based on the homestead exemption, the estate does not have assets to pay a claim, the court shall put a lien on the property for the amount of the claim.

Finding the statute ambiguous, the trial court ruled that actual institutionalization was not necessary to exempt the homestead. The county appealed, arguing that the trial court should have allowed the county to file a lien against the property.

The Minnesota Court of Appeals affirms the denial of the Medicaid claim on different grounds, holding that the caregiver child exemption does require institutionalization, but that Ms. Borg's hospitalization, though brief, counted as institutionalization. However, the court also rules that the county may place a lien on the property, and remands to the trial court to address the lien provision.

To download the full text of this decision, go to https://www.lawlibrary.state.mn.us/archive/ctapun/0707/opa061037-0717.htm.

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