Mom just passed. Medicaid keeps calling about submitting an application. Should I go through with it?

Losing a parent is never easy, and the emotional toll is often compounded by unexpected financial burdens. A recent Reddit post highlights this struggle. Namely, after a user’s mother passed away from cancer, a plethora of calls were received from hospital representatives asking about this person’s mother and her application for Medicaid. 

Of course, every reader’s heart will go out to a person in such a situation. Having to circle the wagon on the death of a loved one repeatedly because a government agency can’t figure out who is alive or dead is a painful proposition.

But the question is still pertinent – should this user continue his or her mother’s Medicaid application in a bid to cancel out some of the mom’s debt from being in cancer for years? Or should this application be best left alone, with the estate and executor left to pick up the pieces?

Let’s dive in.

What Happens to Debt After Death

A person holding money

What’s truly intriguing about dealing with the death of a loved one is the lack of information that’s often made available up front to those who need to make critical decisions around how to deal with such calamities.

In the case of medical debt, or many other forms of debt, that a deceased person may have accumulated during their lifetime, there are varying ways in which this debt can be handled post mortem. While many may assume that the parent’s children will inherit this debt, that’s not usually the case. Rather, it’s typically the case that the deceased individual’s estate will handle this debt.

If the estate lacks sufficient assets, the debt often goes unpaid unless the executor co-signed on medical forms or live in a state with filial responsibility laws. In the Reddit post, the user expressed confusion over the hospital’s insistence on finishing the Medicaid application. This persistence stems from Medicaid’s ability to retroactively cover medical costs incurred before a patient’s death. 

Of course, most financial experts would suggest this individual get legal and financial advice from experts before proceeding. Some debts aren’t obligatory, and can be wiped out via the estate, so knowing which debts need to be paid and which can effectively be ignored is important.

Should This User Proceed with the Medicaid Application?

A young man holding his hands up

In my view, the question around whether this Medicaid application should be completed or not really comes down to retroactive coverage, and whether such Medicaid programs would apply to the deceased individual. 

Medicaid does allow for retroactive coverage in some cases, and can pay for medical services received before an application was submitted. So, it’s entirely possible that this Reddit user could be entitled to some funds from this program, if certain guidelines are met.

It goes without saying that if such a path forward does result in meaningful savings, it’s worth the time. But it sounds from the tone of this post that the user in question is likely looking forward to putting this whole ordeal behind them. So, it’s really a question of how much time one has to manage this situation, or money (having a qualified representative or estate attorney take care of such an application and provide advice can be very valuable).

Other Costs Will Still Mount

$5 bills

The other thing I’d point out about this user’s particular situation is that even if their mom’s cancer-related debt is wiped out, that won’t eliminate the other costs associated with funeral arrangements, travel, and other outstanding bills that will need to be paid from the estate before funds can be disbursed.

There are a range of other programs that can help individuals in sticky situations where they may not have the funds to cover such expenses that are worth looking into. For example, some credit cards provide introductory 0% APR periods to allow for some breathing room during times like these, some employers offer bereavement benefits that are worth exploring, and there are other debt and financing options available to those in this boat.

Ultimately, I think it’s always worth taking the necessary steps to reduce as much of the burden one can expect to receive when the time ultimately comes to deal with one’s estate. For those planning for their own kids’ financial futures when they’re gone, a range of living trusts and other options are available which can simplify and streamline the process. Again, talking with a certified financial advisor and other experts is something I’d always recommend for those thinking about taking these steps.