Experience with Medicaid Recovery NOT related to nursing home?
I had thought that Medicaid putting a lien on your home was only if the patient had gone to a nursing home. I recently contacted my state contact person for Medicaid recovery, and in my state, all expenses Medicaid pays out after age 55 are recoverable. When a person dies they check to see if there are recoverable expenses and put a lien on your home/assets if there are. The surviving spouse may live in the home until their death, but then Medicaid collects, so no leaving anything to your kids. Does anyone have any experience with this happening when a nursing home wasn't used? Is there any way to estate plan like putting your kids on the title to the home before we die, so that it cannot be taken from them? I understand about 5 year look back with nursing home, but again, no nursing home involved at this time. Wondering if there is anything we can do?
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I am pretty sure any help involving Medicaid, they will try to recoup what they put out. My Aunt was on SSI and Medicaid and when she passed, a lean was put on her house of 23k. Because my cousin lived with her and was her Caregiver and disabled, he was allowed to remain in the house. But, if he sells or passes, that 23k needs to be satisfied meaning the house would need to be sold.
My nephew renews his Medicaid health suppliment every year. The application asks if he has any property. So, I would think if he owned a house and passed away, that a lean would be put on the house to recoup monies paid out by Medicaid.
The only way I see you protecting your house is to put it in a trust for your kids. With Medicaid for NH care, this has to be done before before the five year look back or its considered hiding assets. I would think the rule would be the same for in home care and receiving healthcare. But, this would be a question for a Medicaid caseworker.
My nephew also has a "Special Needs Trust" set up to protect insurance money he received from his Mom. The trust reads that the balance of that trust goes to Medicaid upon my nephews death.
Perhaps we will look into a trust option. I was thinking I should probably talk to an estate planner with experience in Medicaid issues.
Medicaid planning is different as it’s about having the person become legitimately impoverished or low income to be eligible for whatever Medicaid program they are going to be applying to.
The 5 year look back of documents…… bank statements, brokerage accounts, the annual awards letter from SSA & other retirements / pensions, all life insurance policies, the Will, any annual assessor / collector bill on house, land, autos….. all have to be provided for the caseworker to review for a LTC Medicaid application. It’s pretty comprehensive. If there were beneficiary changes, asset transfers, it’s going to surface eventually. Plus they know the applicants SS# and that of their spouse (dead or alive) so it’s just a few keystrokes into the state database to see exactly what sold when and to whom. State can look into your old taxes or file a request from IRS. You basically do a all access sign off if you apply for Medicaid. 5 years = 2026
Several exemptions and exclusions to MERP. You should look into just what they are for your states Medicaid administrative code. There could be ones that heirs qualify for. Now it is on whomever is POA or potential future heirs & future executor to document over time whatever needed to establish why an exemption or exclusion factors into estate recovery, and document whatever needed for probate court. The elder could live a other 5 months or 5 years….. Also there’s is a Cost benefit analysis that the feds require to be done.
What JoAnne posted on her nephews $ going to the state (should there still be $ left) upon his death is important. The state can require that SNT have to change the beneficiary to the state as the primary beneficiary. The same things happens with annuities.
There are “advisors” who tout doing annuities as a way to keep $. Yes, you can move your $ into an annuity, it’s an allowed transfer of assets. There’s no gifting transfer penalty as $ doesn’t go to anybody till your dead. But State is going to require beneficiary on the annuity to become the State first & foremost. It doesn’t matter when annuity done either.
DRA changed that and once your state put DRA into their states administrative code the requirements got set. For Medicaid post DRA, MERP (Medicaid Estate recovery) exists for new Medicaid programs utilized over age 55 - not just LTC Medicaid. So community based Medicaid, like IHHS (in home health) will have MERP
MERP got created federally but it gets intertwined with your states property and probate laws. Like there’s a few states that do Lady Bird Deeds and if homestead gets put into a LBD and it’s kept till beyond owners death then no MERP. Some states allow for a life estate created 5 years before to be outside of MERP. Other states, LE r fair game for MERP. Some states allow for assets placed into Testamentary Trusts to be outside of recovery. Also factor in that some states have turned some of the MERP process over to outside contractors, which operate similar to debt collectors.
LSS to do anything “creative” you need to know what might work best for your states approach to estate recovery and what effects your states laws have on MERP. It’s not a DIY, you need an atty who understands what can happen with after death assets.
Trusts sound all fabulous but placing property in a trust doesn’t just solve the issue. House has costs. The “trust” needs to wholly own assets that feed $ into Trust to support house and whatever else the Trust owns for years and years and years. I've been on this site a long time and one thing that comes up again and again is that elders and their family / heirs aren’t really aware of monthly income (of elder) as a required copay to facility. So dad can keep his home as an exempt asset but dad will have zero - ziltch - nada of his his $ to pay a penny on the property from day 1 of NH. Plus $ 4 probably a year or two post death (time needed to deal with probate, MERP, courthouse stuff).
Now for community based Medicaid, they get to keep their income so they have $ to pay property costs. But likelihood is that they will eventually need a higher level of care and that means MC or NH. And then their income has to become the copay to facility. Without parents $ and without assets owed by the Trust & making $ support the trusts assets, the Trust that owns the home defunds. Happens all the time and you can really see this in tax sale listings.
To keep home can be done but will not be simple. To me choices are:
parent continues to own the home whether community based or enter a facility BUT someone will need to have the wallet and sense of humor to deal with house till beyond death then deal with probate, MERP
OR
irrevocable trust created with 100k+ in managed assets (investments) to feed the Trust
OR
kids buy the house now FMV and then parent rents from them
OR
they gift the property now and everybody holds their health together so that there is no Medicaid program applied for till summer of 2026.
Also remember Medicaid is an “at need” program for BOTH medical need and financial need. Medically “at need” is required.