Can Medicaid Take Your House? - Grants for Medical

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), which has been mandatory since the passage of the Omnibus Budget Reconciliation Act (1993).

MERP seeks reimbursement of long-term care costs primarily from Medicaid recipients 55 years or older who have received nursing home care, home and community-based services, or related hospital and prescription drug services. Age criteria specifically focus on those 55 and older, without a separate category for those under 55. 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.

MEDP recovery efforts are deferred when a living spouse remains; Medicaid does not immediately seek recovery. States wait until the spouse’s death or other qualifying events to pursue recovery, with specific protections in place. 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.

California and Texas have specific guidelines for estate recovery that consider the surviving spouse’s situation but do not categorically prohibit estate recovery after the surviving spouse’s death. The extent of recovery can vary based on state laws and individual circumstances. The sole exception to this rule comes when the surviving spouse is also a Medicaid recipient.

For more details regarding MERP, you can check 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 a home from 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, which is usually around US$2,000. Home equity interest is the value of your home that you completely own. States impose varying home equity interest limits for Medicaid eligibility, typically ranging from $603,000 to $906,000 in 2021, affecting whether a home is considered an exempt asset.

Single and Moving to a Nursing Home

A written intent to return home can exempt your primary residence from being counted as an asset for Medicaid eligibility, subject to state-specific equity limits and conditions. 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

Your home may be exempt from MERP if a blind, disabled child or other dependent relative resides there, with exemptions determined based on specific criteria and documentation. 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. This usually protects your home from becoming a Medicaid asset for as long as you are alive.

The state may pursue MERP claims against the estate upon the Medicaid recipient’s death. Still, exemptions apply if a minor, blind, or disabled child resides in the home, protecting it from estate recovery.

In addition, under the “child caretaker exemption,” Medicaid is prohibited from issuing MERP if the recipient transfers 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 by selling the home. The state is prohibited from doing this if the deceased has a child who 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, 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, having your name on the house title is strongly advised. As a non-applicant spouse, you can transfer the house to yourself 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.

Transfer of home ownership to the community spouse can protect the home from MERP claims. Still, state-specific rules and exceptions apply, including potential claims after the community spouse’s death under certain conditions. The reason is that the home is no longer a part of your spouse’s estate upon death.

Married and One Spouse in a 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.

Conclusion

Protecting your home from Medicaid seems extremely complicated, as it involves planning and knowledge of federal and state laws. Thus, it is strongly recommended that you 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.