What are the consequences of selling your parents home if they are in a nursing home on Medicare?

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I am a PA realtor working with a woman who's mother is currently in a nursing home. The daughter is the POA and is unable to maintain her mothers home. She is looking to sell the property but is unclear as to what may happen to her mothers medicare status. The property will sell for under $60k so I was curious what her options might be. She was informed that her mother only has a matter of weeks to live at this point so she was curious as to the consequences of selling now.

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Medicaid does not put a lean on the property until the resident dies. If the woman is on Medicaid, she will be taken off, proceeds of the sale will have to be spent down and then file for Medicaid again. If daughter was involved with Moms filing, she had to show there was a home as part of Moms assets.
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Walter - you're a Realtor, right? If so, I'd suggest that you google "stargazer Texas MERP estate recovery". Stargazer is newsletter for title companies. They did a very detailed article on estate recovery and how it impacts title search and the act of sale. This was from TX viewpoint so however PA laws deal with liens onto property will make a difference (TX does not allow for lien placed on homestead for unsecured creditors - which Medicaid is). Medicaid - whether its a claim or a lein - will come up when the divedown for title is done. It can often come as a blindslided surprise to families so its good that you are being proactive on this now & before you have very unhappy buyers and even more unhappier seller…..

It may be simpler for the daughter to wait till mom's death (if it realistically is imminent) as then the property goes from an exempt asset to a non-exempt asset AND it becomes an asset of the late mom's estate. Selling now means mom makes 60K and so ineligible for Medicaid and the daughter cannot be reimbursed any costs spend on the house easily as Medicaid will consider it to be "gifting" by mom. It could well be that the state (or if PA has an outside contractor like PCG or HMS doing MERP) does not attempt a recovery if property is below a certain threshold. Like for MS, now recovery isn't being done for homes under 70K. For other states if probate is opened the threshold seems to be under 100K. All the executor costs on the house as well as the funeral costs could enter as claims against the estate which could take the maybe 60K house / estate under 40K which may not meet the threshold for PA recovery. The value of property can be the tax assessor figure OR daughter can get it appraised (by licensed and registered appraiser so has a seal) and that document is filed in court to determine the assets of the estate. Once judge signs off on the assets of the estate amount that's pretty much it - even if it means property is just the unimproved (land) value. 


 The feds guidelines have it at no recovery if recoverable estate is 10k or less but states can raise that to something that makes sense (like what MS did). But whatever the situation the Daughter will probably need to get some sort of document that is a release of the claim/lien that is attached to the stack for the sale. TX has a 1 page form that should be filed at courthouse.

IF you would, please let us know what you find out! we all learn from each other.
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Daughter also needs to check admission documents to see if there is a lien for Medicaid on the property that has to be satisfied before title is clear to sell. Lawyer is a must.
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Walteroblankks73,
The nursing home care is probably being covered by Medicaid unless the resident or family are self paying the Nursing Home.

Medicare typically only pays for Nursing Home Care for a short time when the patient is there for physical rehab which does not sound like the case here.

The daughter needs to consult an Elder Care Attorney Familiar with Medicaid laws in your state.
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