Can my brother and I expect to pay recovery for Medicaid and MediCal for our Dad's NH care?

http://www.canhr.org/factsheets/medi-cal_fs/PDFs/FS_MedCal_recovery_FAQ.pdf

I wish I had read this earlier. Great, current info on State of CA recovery.
In our case, looks like we will not have state recovery, but tax consequences as pstiegman suggested. Hope I'm reading this right. How does the saying go? The only certainties in life are death and taxes...

Thanks Chicago, I will. Jeanne, actually the POA spoke three times to an elder law atty. and she assured her this was the way to go to avoid recovery. Seems fishy to me though. I'm expecting we'll have to pay it back anyway, so a large chunk will be set aside for if and when they catch up with us. I'll give them a few years. We have all agreed that the proceeds of the house go to my dads care before we use it for ourselves. At least we can use some of the house proceeds for caregivers, so he is well looked after. We're borrowing from our cousin against the house for that, until it is sold. We have records for everything. Sounds like we'd better review the budget, and fast.
We are very fortunate to be in the position where he does have some funds to work with, even though they're not liquid yet. I know so many do not have any options to even have extra care. I live 1000 miles away, otherwise I'd be able to take care of him a lot myself, and defray some of the costs.
In the end, any amount we get from him will be helpful and appreciated. That's what he always wanted after all. Lots to think about- thanks again for everyone's help.

I googled your question and found a lot of information. I can't include a link on this site. But, look at the State Recovery Act.

We all try to be helpful, based on our own experiences. I think you need to consult an attorney in California who specializes in Elder Law. In some states, whether or not an asset goes through probate makes a difference to the recovery process. "Giving" the house to you while he is on Medicaid is going to have some consequences. It is too bad you didn't seek professional advice before you took this step, but definitely do it now, to minimize the adverse impact if possible. The legal fee will be small compared to the amounts involved. I suggest that you actually talk to an elder law attorney -- and not just an accountant who may or may not be totally familiar with Medicaid rules.

The basic idea here is that each individual should pay for his long-term care to the extent that he is able. Taxpayer money can pick up the slack when a person has exhausted all of their own resources. It is not considered "fair" to give your money and assets away while you are accepting or in preparation for accepting taxpayer money. Therefore there are penalties involved if it appears you are giving things away within five years of applying for Medicaid.

Most people would really like to accumulate something for their children or grandchildren to inherit. As people are living much longer now and very often having expensive end-of-life conditions, it is becoming increasing difficult for working folks to manage that. As the rules are set up, Medicaid is not intended to subsidize inheritances. If you have money or assets you are expected to use them for your own care, and not reserve them for heirs.

(By the way, I'm not saying I agree with how we manage care for elders in this country, but I'm just trying to explain how things work, as I understand it.)

Please, see an attorney very qualified to help you in this matter.

Definitely will have an accountant help figure out this one. We transferred into our names to avoid probate, but didn't think about gift taxes. So I suppose we'll have recovery too then? Transferred property after Medicaid/cal were approved. Hoping (maybe not anymore!) to sell property for about $375k . At this rate we might be in trouble...would like to clear something to help pay for caregivers and send our kids to college. You're so helpful- really an eye opener. Thanks so much for your insight. As you can tell we need all the help we can get- inheritance rookies.

Yes it is already a gift. Good luck figuring out your 2013 taxes. The five year look back starts from the day you applied for Medicaid. They calculate the average daily NH rate, divide the value of the house by the daily rate. For example a $300,000 house divided by $300 per day would result in a penalty of 1000 days that they will not pick up the payments for.

Used up 100 days of Medicare coverage between hospital and NH after two strokes in the Spring. He has since been on MediCal in CA. How long is penalty period- same as 5 -year lookback? Will gives his property to us, but sounds like a gift if we sell before he passes? Was transferred already. Works all his life and wants to give us his property. Govt has to get their share though always...

How did he use up Medicaid? Do you mean Medicare? Medicaid covers low income patients. There will be a penalty period imposed based on the fair market value of his home. That means Medicaid won't pay until the penalty period is over. Keep track of every penny. You will also have problems with the IRS and gift taxes since the transfer is a gift and not an inheritance.