Can Medicaid take your home to pay for nursing home care?

A fellow caregiver asked...

My 85 yr. old mother is almost ready for a nursing home. The house is in her name and us four children are afraid Medicaid will take the house (her only asset) and use the money to take care of her in the nursing home. She said many years ago she signed a paper from Medicare saying she had this asset (the house) and that they can take the house. Us four children want her to sign the house over to us. Is there a paper that she had to sign once she got on Medicare that is stating something like this and if so can she still sign over the house now? We don't know if she is making this whole thing up or was there a paper like that? We don't want the house to be sold if she has to go into a nursing home. Can Medicaid take your home to pay for nursing home care?

Expert Answer

She may be confusing the Medicaid program (covers long-term nursing home care that could last for years) with Medicare (limited to just a few months in a nursing home, at best). Medicare would make no claim on her home, so you only need to be concerned about Medicaid. Sometimes state Medicaid departments will require a person who applies for Medicaid to sign a form acknowledging that they may ultimately lose their home if they accept Medicaid payments. However, the state can never “take” a Medicaid recipient’s home as long as she is living in it..  But a few states have a rule that the home loses its status as an exempt asset for Medicaid purposes if the owner is living in a nursing home and it’s medically certified that she won’t be able to return to live in her family home. In that case, the state could require that the home be sold and the proceeds used to pay the nursing home until the money is gone, and only then would Medicaid begin paying.

 

Nothing is owed to the state to repay a Medicaid bill until after the Medicaid recipient dies, and even in the worst case, the state would only require repayment from your mother’s estate an amount equal to what the state paid out in Medicaid benefits on behalf of your mother during her lifetime. In other words, if she is in the nursing home on Medicaid for two years, and the Medicaid program has paid the nursing home $70,000 for each of those two years, but the house is worth $270,000, then the state could only require repayment of its $140,000, leaving $130,000 for you and your three siblings.

 

Your mother signing a deed to the house over to her children will not solve this problem unless the gift is made more than five years before she applies for Medicaid. If not, this would be treated as a penalty-causing gift and she would be disqualified from the Medicaid program for many months, if not years. An irrevocable Medicaid trust may provide some protection, however.

 

Because of the difference in state Medicaid laws as well as all the variables of the value of your mother’s house, her health, and whether any exceptions apply to the estate repayment requirements mentioned above, you should contact an experienced elder law attorney in your mother’s state for help with this complex matter.