My father owes about $80,000 on his home and it is worth about $85,000. He is single and has a railroad pension of about 2,000 per month. He has no other savings or income. He is on the verge of moving to a nursing home, but believes he will get better while in there and be able to return home. Does Medicaid make the mortgage payments while he is in the nursing home?
Whatever debts the "on medicaid & in a NH" elder has is of absolutely NO concern to medicaid.Medicaid is all about his income & assets and what needs to happen with both for Medicaid compliance. Did the SW or admissions at the NH or the Medicaid caseworker explain to dad / you / his DPOA about the "SOC" & "MERP"??? If he hasn't get moved into the NH & done the Medicaid application yet, it might be best to take a hard look at house costs & what is the likely future for dads health needs & IF keeping the house ever makes sense......
SOC is share of cost in Medicaid-speak & what it means is that medicaid fully expects dad to pay (& this after hes done his spend down on all non-exempt assets till he's at 2k) ALL his monthly income (like his RRRB$) as his SOC to the NH less a small personal needs allowance. PNA varies by state from $ 35 -$ 60. His PNA is it for any extra $ once on medicaid & it realistically just covers monthly costs for beauty/barber shop & some toiletries/clothing replacement. The SOC mandate often totally comes as a surprise......
Now some states will allow a waiver of the SOC for a period of time for those who have a mortgage. You really need to find out ASAP if your states does this& get the waiver request in. The NH is going to expect the SOC to be paid to them. The waiver seems to be just for the mortgage amount only. So all other property costs - insurance, utilities, maintenance, taxes, etc. - will need to be fronted by family with probably no expectation that they will be reinbursed when the house sells. Why? Cause it will be considered more than likely by medicaid as gifting by dad to you from the proceeds of the sale of the home (unless there is some sort of memo of understanding or promissory note on all this done before any funds spent). So dad can't repay you due to gifting.
MERP is estate recovery. Whatever $ Medicaid spends on dad, the state will attempt to get repaid from the sale of the home as it will become eventually a nonexempt asset. Now MERP has all sorts of exemptions & exclusions, plus a cost-benefit requirement; but dealing with it all falls to family to deal with. It's not simple.......
But what I see is the big issue is that dad is basically negative equity on the house. He owes 80k on 85k assessor value, right? well between Realtor commission, closing costs, & I'd bet seller (dad) paying for things..... He may not have any $ from sale of home. He might be best off walking on the mortgage & letting it foreclose. His continuing to pay all house costs may just be a band-aid on a much bigger financial problem. If you don't mind sharing, what type of debt is this..... Reverse mortgage, heloc, 1st & 2nd mortgages.
Keeping an elders home can be done but IMO it works only if house is fully owned & either house is of very very modest value or right at the edge of max property value allowed by Medicaid (550k or 750k); family can & will pay all property costs OR it's rented and either done for however long parents wants home kept; and family can deal with estate recovery exemptions, exclusions & can open probate if need be.
Thus, it is up to the family to make the mortgage payments, pay the property taxes, pay the homeowner's insurance, the utilities, and maintain the house. Right now you are probably thinking who has money to do that !!
Now, if there is a chance your Dad would get better while being in a nursing home, the family should decide [hopefully there is a Power of Attorney for your Dad] whether to try to hold onto the house, or to just go ahead and sell it.
Being that there is $5k in equity, and you do sell the house, that amount will barely cover the commission if you use a Realtor to sell the house, and to pay the commission for a Realtor to bring in a qualifying Contract. Then the family would probably need to chip in to pay for settlement closing cost, such as pro-rated property taxes, the cost of the Settlement/Title company for the time involved, etc.
I believe that all of your dad's income is going to be taken up by his share of cost for the nursing home.