Medicaid and Medicare are completely different programs, with different rules regarding eligibility, coverage and payment. With Medicare, there is no right to repayment from your parents, or from their assets,
for anything Medicare spends for their medical care.On the other hand, Medicare does not cover assisted living, or long-term residence in a nursing home.
Medicaid is the program that may pay for your parents' long-term care, but which has provisions for reimbursement out of their assets, including their home. Here's how it works.In order for your parents to qualify for Medicaid, they must have low income and few assets other than their home. (The exact amount of income and assets depends on the state they live in.) If they qualify, Medicaid can pay the full cost of an unlimited stay in a Medicaid-participating nursing home. In some states, Medicaid can also pay for residence in a Medicaid-participating assisted living facility. This is true even though your parents own their own home.However, if Medicaid covers your parents stay in a nursing home or assisted living facility, it has a right to be reimbursed for all it has spent to care for your parents, and that reimbursement can come from the value of the home when both your parents die. In other words, if your parents leave the home to you and your siblings when they die, Medicaid has a right to reimbursement from the heirs, out of the value of the house.
To find out the specific Medicaid rules for the state where your parents live, use any Internet search engine and enter the words Medicaid and the name of the state, which will take you to the official web site of your state's Medicaid program.Or you can go to the Benefits.gov web site and click on the name of your state. You can also call the Eldercare Locator toll-free at 800-677-1116.
There are some steps your parents might take to protect some of the value of the house from this Medicaid reimbursement rule.They might give the house as a gift to the children before they need Medicaid, retaining a "life estate" which would permit them to live there as long as they need and want to; if this is done at least five years before entering a nursing home or assisted living residence, it completely protects the house. If it is done within five years, it may protect the house but leave your parents having to pay for their own nursing home care for a period of months or years before Medicaid begins to pay. Or, your parents might sell the house to the children, retaining a right to live there. There are also tax consequences to consider with any of these, or other, options. If you and your parents are considering taking steps to protect the house from Medicaid reimbursement, it makes sense to consult with any attorney experienced in these matters. You can find such an attorney by contacting your local county's bar association and asking for referral to lawyers who are experienced in Medicaid legal issues.