Can Medicaid Take Your House – Overview
Most elderly persons who receive assistance or care through Medicaid frequently wonder what would happen to their homes. Besides this, it is also a great concern among adults whose parents (mother, father, or both) need Medicaid assistance to reside at a nursing home facility. So, can Medicaid take away their homes after the Medicaid recipient dies?
Let’s find the answers to this common question.
Medicaid Estate Recovery Program Rules
Every state in the US runs the Medicaid Estate Recovery Program (MER or MERP). These programs have been mandatory since the passing of the Omnibus Budget Reconciliation Act (1993).
Under this rule, MERP can seek reimbursement of long-term care costs for Medicaid recipients over 55 years old and for Medicaid recipients less than 55 years of age who have received nursing home care. This can be applied if the Medicaid recipient requires in-home care, community-based care (adult day care or assisted living care) or nursing home care.
The state attempts to recover the expenses of benefits from the recipient’s remaining estate. Usually, the only asset of any significant value that remains at the time of the Medicaid beneficiary is their home. The Medicaid agency often reimburses the sale of the home.
However, the MERP rule is not applicable if the Medicaid recipient has left behind a living spouse. In such cases, Medicaid cannot try to recover long-term care costs. Additionally, most states have restricted time frames to file for estate recovery. Usually, Medicaid can file asset recovery claims within a year of the Medicaid recipient’s death.
However, it would help if you remembered that not all states have the same MERP regulations. For instance, some states like Florida allow Medicaid to attempt reimbursement for Medicaid recipient care by selling their home, but only after the recipient’s living spouse has passed away too.
In contrast, other states like California and Texas prohibit estate recovery even if the recipient’s living spouse dies. The sole exception to this rule comes when the surviving spouse is also a Medicaid recipient.
For more details regarding MERP, you can check out the official website at https://www.medicaidplanningassistance.org/medicaid-estate-recovery-program/.
Medicaid Estate Recovery Under Different Circumstances
Let’s take a closer look at how MERP works in different types of circumstances:
Single and Living Alone at Home
Medicaid cannot take the home of a Medicaid recipient if they have lived in it and their home equity rate is under a certain value. In short, the home does not count towards Medicaid’s asset limit, usually around US$ 2,000. Home equity interest is the value of your home that you completely own. Different states have different rules regarding home equity limits.
Single and Moving to a Nursing Home
If you relocate from your home to a nursing facility, you will need to provide a written statement of intent to return. This allows your home to be exempt under Medicaid regulations if your home equity is under a specific value. Some states allow up to 6 months for recipients to return home.
In such cases, if you have not returned home in the specified time frame, your home is counted as an asset, making you ineligible to receive Medicaid benefits.
Single With Grown Children Living in the Home
If even one of your grown-up children lives at home and is disabled or blind, then your home is exempt from MERP, regardless of your home equity interest. If you have all healthy adult children living in your home, then this does not exempt your home from being considered a Medicaid asset upon the death of the Medicaid recipient/homeowner.
However, you can file an “intent to return home” statement detailing your plan to move back home if you are able. This usually protects your home from becoming a Medicaid asset for as long as you are alive.
Even if you die, Medicaid will try to compensate you for long-term care expenditures through MERP. However, the state cannot cover your home if you have a minor, blind or disabled child staying at home.
In addition, under the “child caretaker exemption,” Medicaid is prohibited from issuing MERP if the recipient chooses to transfer their home to a healthy adult child under certain circumstances.
Single and Has Passed Away
After the demise of a Medicaid recipient, the state usually tries to recover long-term care costs through the sale of the home. The state is prohibited from doing this if the deceased has a child that is blind, disabled or under 21 years of age.
Married and One Spouse Moving to a Nursing Home
When a spouse is moved to a Medicaid-funded nursing home, then the other spouse is considered the community spouse. Hence, the Medicaid recipient is allowed to keep the home. There is no home equity value limit applicable in such cases.
However, it is strongly advised to have just your name on the house title. As the non-applicant spouse, the house can be transferred to you without violating Medicaid’s look-back period rules. If the home is not solely in your name when your spouse passes away, it may not be safe from MERP following your death. Therefore, transferring the home title to your name will protect it from MERP.
Additionally, the state will not be able to stake a claim against the home, even after your death. The reason is that the home is no longer a part of your spouse’s estate upon death.
Married and One Spouse in Nursing Home Passed Away
As long as a living spouse lives in the home, the property is exempt from MERP. Some states’ MER programs try to recover the cost of long-term care after the surviving spouse’s death. Other states do not attempt to recover these costs unless that spouse is also a Medicaid beneficiary.
Protecting your home from Medicaid seems extremely complicated as it involves planning and having the knowledge of federal and state laws. Thus, it is strongly recommended to seek help from a professional Medicaid planner to avoid incorrect implementation of a strategy and to ensure that your home is protected after you pass away.