Are you worried about your parent’s home after they’ve entered a nursing home and gone on Medicaid? You’re not alone. This is one of the most common concerns families face when navigating elder care. In Medicaid terms Mom is a “recipient.”
The Scenario Many Families Face
A common story: “Dad has passed away, and Mom has been living at home with help from you and your siblings. Despite our invitation to move in, Mom insisted on staying in her own home. Then came the fall, the broken hip, and suddenly Mom couldn’t return home. Now she’s in a nursing home. Her savings will be depleted in just a few months. The social worker told us then we will have to apply for Medicaid. Now we heard from another family at the nursing home: ‘Medicaid will get your house after your mother dies.’ ”
Is It True? Will Medicaid Take the House?
Yes. Strictly speaking Medicaid does not “take” the house. Your local state government can force sale of your parent’s home after they pass away to payback the Medicaid program.
Does Medicare Take the House?
No.
Does Medicaid Take the Home of Taxpayers?
Yes. Being a taxpayer makes no difference. And note, a few states will exempt the home, but most states make a payback claim against the home whether the recipient paid taxes or not; whether they worked hard, paid off a mortgage, and paid all taxes or whether it was given to them. Medicaid will take any home if your state allows and most do.
Can We Avoid Estate Recovery?
Yes. See an Elder Law Attorney.
Medicaid Estate Recovery: The Basics
What Medicaid programs require payback (Estate Recovery) after death? Nursing Home; 1115 Medicaid Waiver; and PACE.
Nursing home residents over 55 on Medicaid: Recovery
After they pass away, Medicaid will seek repayment from their estate.
Medicaid recipients over 55 receiving home-based care: Recovery
States require payback from the estates of all recipients over 55, even if they never entered a nursing home. Check your state’s rules.
Medicaid “Capitated” Programs: Recovery
If your parent enrolled in a Medicaid capitated program they will have to payback a fixed, predetermined amount per month as the monthly capitation amount for every month they were on the program even if they never used any benefits.
PACE (Program for All inclusive Care for the Elderly) requires payback.
Medicaid Waiver does not always require payback.
Check your state. In most states that do require payback, called Estate Recovery, it is of monthly capitated amount, not the amount of benefits received.
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- Example: Mrs. Smith enrolled in a Medicaid capitated program to get prescription relief. It saved her $200 a month on prescriptions for 40 months, saving her $8,000. However the monthly capitation amount is $2,500. Her estate will have to pay for 40 months at $2,500 = $100,000!
Can You Save the Home? Yes, But Act Quickly
In all states it is possible to protect the home before application. In many states, you can protect the family home from Medicaid recovery even after receipt of benefits. Here’s what you need to know:
Protection During Lifetime
All states must postpone estate recovery while:
- A surviving spouse lives in the home
- A minor or disabled child lives in the home
- A sibling who co-owns the home lives there
State-Specific Strategies
Each state has different rules and typically there are many options that will avoid estate recovery. But how do states collect from the estate?
In Michigan, Estate Recovery is limited to probate of Recipient’s estate.:
- Medicaid recovery only happens through probate of the recipient’s estate. Avoid probate, avoid recovery.
- A “Lady Bird Deed” can transfer ownership while avoiding probate
- If no probate estate is opened within three years of death, Medicaid may lose its ability to recover
In Other States, on the Recipient’s death:
- Some have “expanded estate recovery” that includes property avoiding probate such as jointly owned property
- Some place “TEFRA liens” on property while the recipient is still alive – very hard to avoid estate recovery
- Hospice care at home might allow for planning options in specific situations
The Most Important Advice: Consult an Experienced Elder Law Attorney
This is complex legal territory that varies by state and changes frequently. Consult with an experienced elder law attorney in your area before making any decisions.
Remember: It’s never too late to explore your options. Even if your loved one is already in a nursing home receiving Medicaid, there may still be legal strategies available to protect their home and your family’s legacy.
Have questions about your specific situation? Connect with a certified elder law attorney who understands the Medicaid rules in your state. Call us for a referral: (248) 356-3500.