My dad entered the nursing home 5 days ago for long term care. The business office called to talk about how I planned to pay for his care. He has a long term care policy that will pay $100 per day up to $100,000. He has a few investments that will pay for I guess, about 6 months of care. He still owns his home, but has been living with me due to his vascular dementia. He has been renting the home to my daughter and son-in-law. The business manager said Medicaid could put a lien on the house to pay for his care. Clearly I did not understand anything I read about owning a house and Medicaid. This may sound terrible, but I oh so hope my dad will be out of it enough that he never has to know he lost the house. That was his legacy. He was so proud!

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About the house, it is considered an exempt asset as long as it was his primary homestead and it;s value is under either 500K or 750K (depends on the state). It could be higher if the house is within a farm or ranch land. If he changed his address to your home or removed it as a primary residence, Medicaid may not allow for the home to be exempt. So watch how you answer any ? on the house. If all this makes you verklempt, then think about getting an elder law attorney to work with you on dad's application.

It sounds like you all would like to keep the house. It can be done (my mom still has her home and is on Medicaid @ a NH for a couple of years now) but you have to be creative & realistic about it's feasibility. The house can remain, in most states, exempt for their lifetime. There will be a MERP (Medicaid Estate Recovery Program) claim or lien on the property if they have Medicaid pay for their care. MERP has to be done and is in all states. How MERP is done is very dependent on your state laws on probate and property. MERP is ultimately a legal process and done via probate. If you dad has a will, in order to settle his estate probate will need to be done. If your state is an equal lien state, then MERP has more advantage. If your state is a level of claim state, then it has less advantage. My mom is in TX which it is a class 7 claim and TX allows for 4 years for probate to run AFTER letters are even presented so MERP recovery rates are low. Still happens but lower.

Now once they are on Medicaid, there will have no real $ to pay for anything on the house. Their PNA will not be enough to pay for things on the house. So someone will need to pay for everything on the house....taxes, insurance, utilities, maintenance, etc.....and for the lifetime of the NH resident and whatever time it takes for probate to settle. If the property is empty, then all the costs on the house paid for by others is an exemption to MERP. This is the situation for us with my mom;s house and there are 2 of us who will file claims against her estate on this. For us, this is works and my mom really wants to return home and does an annual statement to that effect, but only you can determine if this can work for you all for the final run of dad's life.This could be several months or could be years. You have to be realistic if you and your family will do what they say they will for the possibly months or years of keeping the home.

If the rental covers the costs on the house, it could work but Medicaid will probably really look at the rental agreement to determine if it is a fair-market rental (and not a preferential rate as they are family). My mom's application got 2 reviews, the first was the caseworker for the NH and then due to her house issues (and also I believe on her zipcode which is viewed as affluent) she got a second review on her application. They want specific answers to their questions and in a short time frame. My mom had a ? on the value of her old-school insurance policy and I had like a couple of days to get this to them or she would be declined. I got a broker with a TX insurance license to do a letter stating it was term, but really most people don't have a broker they can just call to get them to do this for them. If all this starts looking complex, I'd call about to find an elder care attorney to work with you all in this. Good luck and keep a sense of humor...if you can.
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lgregg - Welcome to the maddening maze that is Medicaid for NH. With NH costing from 4K - 15K a month, a $ 100.00 a day copay insurance policy will not go far into paying for his care. I would suggest that this coming weekend you take the time to carefully go through dad's financials to see just where he stands in his assets & income. If he had a broker who handles his investments, contact them to set up an appointment. They may require that you have a DPOA to do this. Go through his life insurance policies to see what is term and what is whole life (has a cash value & he will need to cash it in).You need to have a good understanding of what he has and how to make it liquid. This could have costs to do all this too. Also find all the documents on the house you can - the tax assessors usually send out the tax bill in Oct or Nov for a January, 2014 payment so be on the lookout for that.

BTW you are lucky that the NH takes LTC insurance. Many don't - my mom's current NH does not take any LTC policies, only either private pay or Medicaid. The policies often require quite a bit of reporting in order to pay and just not worth the time for the NH to do.

Has the NH spoken to you about his required co-pay under Medicaid? Right now he is considered private pay so this may have not come up. But realize that once he is on Medicaid, he is expected to pay the NH all of this monthly income less whatever your state has as it's "personal needs allowance". The PNA varies by state from $ 35 - 90. My mom's is $ 60.00 a mo, and really is just enough to pay for their hair salon or barber shop visits, or snacks, or magazine or cable fees.

Now you need to understand how Medicaid evaluates "income" and "assets". Income is simple, it's whatever they get paid each month. SS and retirement are the most common. If dad has an annuity, this will be totally sticky to figure out and I'd suggest you get an elder law attorney to work with you & the advisor who set up the annuity on how to best deal with it. Now each state has their own ceiling on their monthly income. TX is $ 2,094.00 so if it;s under that, they are good for income. If dad is over the limit, he will be declined (there are things you can do if that is the case, but that is another post). So figure out his income. Right now figure out the rental income but don't count it in as income just yet.

Now about his assets, they are in 2 categories: exempt (house & 1 car) and nonexempt. His nonexempt will be savings, investments, rental property or income, any insurance with a cash value, basically anything that can be cashed out. Most states have it so that their non-exempt assets have to be under $ 2,000.00. Over 2K has to be spent-down on their care (like paid to the NH) or their needs (here you can be creative) or for their property (like their home).

Lets say dad has investments that can be liquidated to 50K. So he needs to divest 48K asap. He can: buy a irrevocable no cash value funeral & burial policy (this could run to 10K in most states - & if he doesn;t have this, I'd do this first); dad can spend whatever on health needs that Medicaid doesn't cover, that would be dental care (non-existent on Medicaid), new hearing aids, new eyeglasses, top of the line walker or scooter; lots of easy care and durable clothes (the laundry at the NH is super hot and sterilizing and make short work of their wardrobes); You can buy extra stuff and just store them for him too. (If I had known just how many pairs of shoes my mom would loose on a regular basis, I would have bought a dz pair of those hideous SAS shoes she loves). Also you should spend-down to get all of dad's legal updated and perhaps a codicil to his will (especially if it is old and someone in the will has died). All these are totally OK to do for spend-down. Now the NH would probably prefer that you paid them all the $ for spend down, but you can spend it on other things for his needs or his care. Keep records and pay for things out of his checking account. Your paying for stuff and being reimbursed makes things sticky for Medicaid evaluation, so don't do that, really.

He is allowed 1 car. If he has more than 1, do not gift it or give it away. It needs to be sold for whatever is close to it;s Blue book value. Car registration like property ownership is all recorded by the local assessor and dovetails into the state system, so they will know if you do this and it will cause a transfer penalty inquiry.

Will do another post on the house....
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You can start getting some answers by Googling your state and Medicaid. Then, search for Estate Recovery on your state's Medicaid web site. Different rules apply in each state and for every circumstance. Basically, after your father's funds are exhausted to pay for long-term care, Medicaid funding kicks in, and yes, they can place a lien on the house, recover rent moneys, and any other sources of income. They may even require you to sell the house and provide a final accounting (with a check of the proceeds sent to the state.) Your father will basically be left with about $2k or less in his account. Medicaid's Estate Recovery is somewhat cloudy, and most social workers and even local Medicaid workers do not know the rules. After you do your research on the net, it's a good idea to find the person at your state's headquarters' office. That is, find the person who handles the estate recovery at the state level (not the local level). This is the only person who will know the rules and can provide you with proper guidance. Of course, an estate attorney can help, but I did all of the legwork myself . . . just be careful who you ask. You will get different answers from practically everyone, but ultimately, the "Medicaid home office" estate recovery specialist is the only person who can answer your questions. (It took me 4 weeks to find that person by commenting on my state's Medicaid web site and raising a little hell about the lack of information provided on their web site.) Avoid mistakes by NOT taking the advice that well-meaning people and local level social workers and Medicaid reps might offer. Each case is unique. Take your time, do your research, and consider all of the options before you do anything. Good luck to you and your father.
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