Can your primary home be sold once long term Medicaid has started?

Follow
Share

My mom's home is still in her name and was exempt because it was her primary residence. Now that long term Medicaid is starting with her in a nursing home, my siblings want to sell the house. Won't Medicaid make us "spend down" the money ? My siblings think that now that I got her long term medicaid approved, we can sell the house without it affecting the medicaid. I can't find specific answers to this online.

This question has been closed for answers. Ask a New Question.
5

Answers

Show:
I vote for the eldercare attorny option too - I found a good one by looking at web sites, and got the proper advice from the one whose site actually had some evidence that they were knowledgable about Medicaid in our state.
Helpful Answer (0)
Report

ALso regarding Jeanne's comment, you should go onto your state's Dept of Health & Human Services site (or whatever runs Medicaid) to see what your state has listed as exceptions to the MERP lien or claim. The 2 year rule is basically that IF a person living in the elder's home provided for their care for 2 full years prior that kept the elder from going into the NH and onto Medicaid for those 2 years then the house is exempt from MERP. But you have to be able to show you did this - if you have a full time job then that's a stretch......there are other exemptions from MERP like for handicapped heirs. You just have to see if any of those apply.

For us, as it's an empty house with no one living there, our exemption is going to be all the expenses on the property.
Helpful Answer (0)
Report

llcrs - you are right. My mom is on NH Medicaid and still has her home and I discussed the house situation with her attorney and Realtors to figure out what to do with it. Still have the house and will till she dies. Alot of this depends on what $$ you all can deal with and how big of a sense of humor you have (or members of your family don't have...imho).

When your mom did the Medicaid application, there was an acknowledgement of MERP somewhere within it. MERP is Medicaid Estate Recovery Program in which the state seeks to recover any expenses paid via Medicaid from the deceased estate or their assets. MERP in essence places a notice of possible lien or claim on the property. When you put a house on the market almost always you have to do a disclosure form as to any issues or encumbrance that could affect the sale. MERP is an encumberance. Some Realtors won't take a elder's estate property as a listing because of MERP and some title insurance won't do one either because of MERP - this is on after death sale. But you want to be careful so that MERP claim or lien ability doesn't become an issue in the sale.

The house is an exempt asset under Medicaid rules even if she is in a NH. The exemption remains in force as long as the house is maintained as her homestead and she maintains a reasonable desire of right of return to the home.

But it gets sticky in that:
- all of mom's income must be paid to the NH less whatever is mom's states
personal needs allowance ($ 30 - 90 mo); so there will be realistically none of mom's $ to maintain (taxes, insurance utilities yard care). With my mom's house, I and another family member pay for all for the empty house. I maintain to the penny records and when my mom dies, I will file let the MERP program know I will seek reimbursement on all expenses from her estate. This only works if the house is empty - if family is living at the house, they are fully expected to pay for all with no future deduction of those expenses against the MERP tally.
- it needs to be their primary residence, so you need to keep the address active
So for my mom, her state issued ID, SS, retirement, Medicare statements go to her home. Her NH stay is viewed as transitional and when she gets better can move back home. She maintains a reasonable right of return.
- disclosure of asset change. My mom's Medicaid application gets renewed every year and in the multi page form, you have list the details on the home and current assessor value and have to disclose any change of exempt assets.
- assessor still has it listed under her name and filed for appropriate exemptions
- depending on your state and legal advice, mom does a "wanna go home" annual letter that you keep on file. Our attorney advised this be done every year.

All this keeps the house exempt. BUT once the house is sold, then the proceeds from the sale become liquid assets for mom and will make her ineligible for NH Medicaid payment until the $ is spent down on her care and needs. If the family takes the $, then there can be a transfer penalty imposed by the state for the amount. This gets super sticky in that there can be a lag time in the transfer and when Medicaid finds out. Property records are recorded by the state and all this info is just keystrokes away and they will find out. What can happen is a few months after sale and $ dispersed, the state will send a letter to whomever is the elder representative and the NH, that a transfer penalty has been imposed and the amount and # of days. The NH will in turn send you or whomever signed off as the financially responsible one a 30 day notice that you have to come up with the $ or sign a contract as to private payment for the penalty period. If you don't, then they can evict her. She won't get kicked to the curb but what can happen is that, she can become an emergency ward of the state for NH placement and you all are cut off from any say on where. So mom get's moved at state expense to a NH that really really needs filled beds (it's in the middle or nowhere or less than ideal). All this is a total panic situation to find yourself in and awful predicament for mom.

The $ needs to be set aside and only used for paying for her care and needs. The problem that often happens is that there is 1 sibling who is always at-need financially and they go and spend their share of house $. Then when the state does the transfer penalty, there is none of the bad siblings $ to use and the rest of the family has to cover it. If you sell the house, the $ really needs to go into mom's bank account and stay untouched by family until your state's Medicaid program gives you direction as to how to do this correctly.

Transfer penalty varies by state. For TX it's about $ 145 a day and that's low. So a 100K home means about 690 days that she in ineligible for Medicaid NH payment BUT she is still accepted in the Medicaid program. She is still in it as long as the $ is being spent down. Yes, that's confusing but you get it, don't you? The NH will likely have experienced this and can tell you who the state caseworker is for their NH, so you can speak with the caseworker so that mom stays in compliance & you don't have to reapply and requalify & your family stays as kum-ba-ya as possible. Good luck.
Helpful Answer (0)
Report

JessieBelle is right. Medicaid recipients are expected to spend their own money on their own care to the extent that they are able.

It could still make sense to sell the house, however. Is the family able to maintain the property, pay the taxes, insurance, etc.? When Mother dies the state can recover their expenses from the value of the house. If you do keep it, be sure to keep very careful records of what you spend on it, to be reimbursed before the state makes its claim.

You may want to discuss the options with an Elder Law attorney.

By the way, did any of you live in the house with your mother, caring for her before she went into NH? If so, discuss that with the lawyer, too.
Helpful Answer (2)
Report

The house is your mother's, so the money will be hers. Therefore, the state has the right to use the money for your mother's care. I suspect it would make her ineligible for Medicaid coverage until the money is spent. The house is exempt from spend-down because there is a chance your mother could return to it. If it is sold, that no longer applies.
Helpful Answer (2)
Report

This question has been closed for answers. Ask a New Question.
Related
Questions