Can my father's house be taken to pay for long term care?
My husband and I bought my father's home before he was told he had Alzheimer's and dementia, and then about a year later we found out. Now we have been told it can be taken from us to pay for long term care since he doesn't have long term care insurance but makes to much for Medicaid. Is this true? Karen in alabama
Expert Answer
It sounds like what you've heard about has to do with Medicaid. Nobody can take the house from you. But your father might be prevented from qualifying for Medicaid coverage of long-term care if he sold the house to you for less than its real value.
To qualify for Medicaid coverage of long-term care -- either home care or nursing facility care -- a person must have low income and few assets. If your father has income or assets from the sale of the house to you, that might make him ineligible for Medicaid coverage of long-term care. He would have to spend that income or assets down to Medicaid eligibility levels before Medicaid would cover his care.
Another Medicaid rule might also come into play. If your father sold the house to you for less than its real market value, then Medicaid might still consider the house as "his" asset in deciding whether he's eligible for coverage of long-term care in a nursing facility. (This rule does not apply to Medicaid coverage of home care.) Medicaid would consider any asset transferred by your father for less than market value within 60 months (within 36 months for transfers made before February 8, 2006) prior to applying for Medicaid as still belonging to him when it considers his eligibility for nursing home coverage. That doesn't mean it can place a lien on or "take" the house if it's now in your name. But it does mean that Medicaid would rule your father ineligible for Medicaid coverage of nursing home care for a substantial period of time. The exact amount of time would depend on the true value of the house and the average cost of nursing home care in the state where your father lives.