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Detailed Answer

In New Mexico, the Human Services Department (HSD) must seek recovery from the estates of Medicaid recipients who were age 55 or older at any point while receiving services, or permanently institutionalized. This mandate comes from federal law (42 U.S.C. § 1396p(b)) and is implemented in New Mexico Administrative Code (NMAC) Title 8, Chapter 335, Part 7 on Estate Recovery.

1. Understanding Medicaid Estate Recovery in New Mexico

Estate recovery may include assets owned by the decedent at the time of death, including homes and other real property. However, New Mexico law allows HSD to waive or compromise recovery if it would cause undue hardship to heirs or beneficiaries. See NMAC 8.335.7.32.

2. Eligibility for a Hardship Waiver

You may qualify for a hardship waiver if recovering the debt would leave you without a primary residence, impose severe financial burden, or create other undue hardship. Grounds often include disability‐related expenses, low income, high medical costs, or unique family circumstances.

3. Application Process

1. Obtain the Waiver Form: Request the “Request for Waiver or Compromise” form (FRA-101) from the HSD Estate Recovery Unit or download it online.
2. Complete the Application: Provide details about the inherited property, your relationship to the decedent, and a narrative explaining why recovery would cause undue hardship. Include monthly income, expenses, and any special needs.
3. Gather Supporting Documents: Attach a copy of the death certificate, probate documents or will, recent income statements (e.g., Social Security, pay stubs), mortgage or rent statements, property tax bills, and records of medical or caregiving costs.
4. Submit Your Request: Mail the completed form and all attachments to:
   
   Estates Recovery Unit
   New Mexico Human Services Department
   P.O. Box 2348
   Santa Fe, NM 87504
5. Follow Up: HSD has 45 days under NMAC 8.335.7.31 to review your request. They may contact you for additional information.
6. Receive a Decision: If approved, HSD will waive or reduce its claim. If denied, you can request an administrative hearing within 30 days under NMAC appeal procedures.

4. Hypothetical Example

Maria inherits her mother’s home in Albuquerque and later receives a $40,000 estate recovery claim from HSD. She completes the FRA-101 hardship waiver form, documents her monthly disability expenses and limited income, and submits supporting paperwork. HSD grants the waiver, allowing Maria to keep her home.

Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.

Helpful Hints

• Submit your waiver request promptly to meet all deadlines under state rules.
• Keep copies of every document and use certified mail or trackable delivery.
• Seek assistance from a Medicaid planning attorney or local legal aid office.
• Consider long-term planning tools (e.g., irrevocable trusts) well before inheriting property.
• Respond quickly to any HSD requests to avoid delays or denials.