My parent is in need of nursing home care, their savings have been exhausted to pay for it, the house which they own and reside in has been sold, and proceeds from the sale of the property have also been exhausted to pay for care. They qualify for Medicaid and there are no other assets to draw payment from.
Do we still need to pay Medicaid back for financing the rest of the time my parent is in a nursing home until their passing?
Do not rely solely on responses here.
Counties / specific situations can be very different.
You need to contact professionals that work in these areas.
You do not want to be penalized for not doing what you need to do.
Get everything in writing.
Keep good notes. (Date and time every conversation).
Make copies of everything you send through the mail / email.
You need a paper trail.
Gena / Touch Matters
Medicaid, by law, has to try and recover what they put out. The person that is the parents contact will get a letter telling them the amount due. It will then ask questions. One being are there any assets, if none thats what you put "parent died penniless". With my Mom, she still had a house, no other assets. When it sold, the lien placed was satisfied. If it had never sold, Medicaid would still be waiting for their money.
If so, then that too will be applied toward their costs of care, and Medicaid will pay the difference. They may be allowed to keep a small amount of "spending money", for such things as clothing.
But you won't owe or need to pay back Medicaid for "financing". It's not a loan.
It's what all of pay into with our income taxes, so that it is available to us when we need it.
hang with me on this as it’s is NOT straightforward:
1. Medicaid are State run programs & several Medicaid programs exist.
2. if folks are low income, then they maybe able to qualify for Medicaid as health insurance. They would be “duals” so on Medicare AND Medicaid for their health insurance. Super common & this Medicaid program is income based, not what they have for assets.
3. if both at the point of being medically “at need” for custodial care in a facility that does skilled nursing, aka a NH/SNF, they can file for LTC Medicaid. If they are not yet needing care in a NH (skilled nursing), and IF their State does LTC waivers they could have apply for the waiver to pay for AL or a MC place. fwiw 8/9 out of 10 times MC are licensed as AL, not as a NH but under AL licensing.
HOWEVER…
4. LTC Medicaid both “at need” medically and financially. Financial means a lookback on what their income and assets were during this period. 5 yrs is pretty much the standard for most States. So they or their POA will need to provide up to 5 years bank statements, their current retirement & annuity income info and all “awards letters” (eg letter from SSA in Nov which states to the penny what they will get paid by SSA in 2025) to determine what monthly income they are receiving, info on life insurance policies, info on home & auto ownership. Some States allow LTC application and required documentation to be filed 1-2 months in advance of entering a NH, others require them to actually be in a NH in order to file for LTC Medicaid.
IMPT: if a car or home was sold, it had to be sold at FMV with all $ from Act of Sale 100% theirs, so no gifting. For homes what usually is used for value is County Tax Assessor/ Collector value placed on property tax bill. If parents sold their home not using a Realtor and not doing an MLS type of sale, Medicaid is going to look at the sale in detail by viewing the State City / County courthouse database which State caseworker has full access to. Caseworker looks to see if FMV done and if sale was arms length sale (so not sold to family or neighbor at a special price). They are looking for gifting. Because if so, parent will not be eligible to be on LTC Medicaid to start with till beyond a transfer penalty period. If this happens all your worries about after death Estate Recovery won't matter as they will not be eligible for LTC to start with.
for example: A mom owned modest 200K home outright. Favorite nephew buys it for 100K 3 yrs ago but lets his Aunt live there rent free but she pays all property costs. Aunt has spent down that 100K and now at a mere 2K in assets and has SSA of $1500 mo. Although she is at the 2K asset max and under the $2829 income max most states use, that she sold her 200K home for 100K is a 100K transfer penalty placed on her LTC Medicaid application as done within 5 yr lookback period. If her State LTC Medicaid pays NH $255 a day, this would be a 392 days transfer penalty period in which LTC Medicaid will NOT pay. Penalty count down starts the date of the filing of the application. Someone in the family would need to private pay her bill to date & then sign off on a legally blinding contract with the NH for this if this elder is to stay at the NH. This ends up the POAs problem. Nephew - unless POA - has no responsibility to pay add’l 100K or transfer ownership back, as he will say she did it of her own free will.
Imho IF the sale of your folks house was not full tilt FMV and if any transfer of $ over $500 btw your parents and you or other siblings, doing their LTC application is not a DIY. Your folks need to find an elder law atty experienced with LTC Medicaid to shepherd their application and have the house sale reviewed by a Real Estate attorney.
If your ELDER, who as you say now has NO assets, passes, there will be no assets.
So the notice will go out that you owe whatever. Then it is on you to say "Died. No probate. No assets". That means there is nothing to pay them with.
YOU don't pay anything EVER.
And, as long as there is no estate of monetary value, assets over the allowed states limit or inheritance that they received while receiving Medicaid LTC there is nothing for Mediciad to claw back.
All income that is received through annuities, pension and social security should be paid to the nursing home monthly.