Editorial: Death and property

Friday, Sept. 26, 2003 | 9:42 a.m.

If you own a home in Nevada but are cash poor and want the state to cover fees charged by hospitals, doctors or nursing homes, it can be arranged -- but at a price. The price is in the form of a lien the state places on the property. It can work well, because agreeing to a lien means you don't have to count your home as an asset when applying for Medicaid.

And on the surface, it's fair to your surviving spouse should you die. The state only collects on the lien after your spouse dies and it has an unwritten policy to release the lien if your spouse sells the property. This ensures that your spouse will never lose the home because of the lien and that your spouse will receive full value if the home is ever sold. The state executes a lien only after the death of a spouse who has chosen to continue living in the home.

A Las Vegas woman, whose husband died after receiving about $145,000 worth of care under Medicaid, is suing the state, arguing that its continued lien violates her property rights. She won her case in District Court and the state appealed to the Nevada Supreme Court, which heard arguments this week. We agree with District Judge Ronald Parraguirre, who ruled that such liens place a "tremendous chilling effect on the property rights of surviving spouses." Those eligible for Medicaid have virtually no liquid assets. In the case of Medicaid patients who recover from their illnesses or injuries, it's fair to retain the lien, in the event their fortunes improve as well. But in the case of a Medicaid patient's death, the property, typically a very modest home, should become free and clear for the surviving spouse.