Can a lien be placed on property in Florida for nursing home costs?

A fellow caregiver asked...

In the state of Florida, can Medicare or Medicaid put a lien on my dad's property to recoup the nursing home costs?

Expert Answer

First, let's get Medicare out of the way. Medicare coverage for a nursing facility stay is very limited, applying only to medical rehabilitation in a skilled nursing facility, and does not include long term residence in a nursing home. If your father were to receive any Medicare coverage for a short term stay in a skilled nursing facility, he would not be required to repay any of the money Medicare spends, and so there would be no Medicare lien on his house or any other of his assets.

Medicaid is a different story altogether, although the Florida Medicaid rules -- each state has its own Medicaid program and somewhat different rules -- are very generous when it comes to protecting a nursing home resident's home.

There's the initial question of whether your father's home would allow him to qualify for Medicaid coverage of his nursing home care. If your father is unmarried, under federal law the Florida Medicaid program is supposed to find him ineligible for nursing home coverage if he owns a home but permanently leaves it to enter a nursing facility. If he owns a house but under the state's rules he qualifies anyway for Medicaid coverage of nursing home care, Medicaid is supposed to recoup from the value of his house whatever Medicaid spends on his nursing home care. Medicaid would ensure that this happens by putting a lien on the house. These rules are meant to prevent people who have assets (a house) worth hundreds of thousands of dollars from refusing to use those assets to pay for their care, and instead having the taxpayers pay for it through a program that's intended to help the poor.

Florida, however, along with a handful of other states, does not enforce either of these rules. Under Florida's Medicaid, if your father indicates on his Medicaid application for nursing home coverage that he "intends" to return home, Medicaid will not count the value of the home in determining his eligibility (unless the home is worth more than the state's limit -- see below). This protection applies even if there is no realistic possibility that your father will ever be well enough to actually move back to his house. As a result, the Florida Medicaid program does not place a lien on the home of a nursing home resident who states that he intends to return home. This policy by the Florida Medicaid program means less money for Medicaid and a bigger hit for state and federal taxpayers, but can benefit some individual families with valuable family homes.

There is another rule to be aware of. If your father's equity in the house (the value of the house minus what he owes on it) is more than $500,000, he will not qualify at all for Medicaid coverage of a long term stay in a nursing home. However, this figure may change by the time your father applies for Medicaid nursing home coverage -- federal law allows states to move this amount up to $750,000, and there are legislative proposals to do so in Florida.
To get details about these rules, you can contact Florida's free information program Serving Health Insurance Needs of Elders (SHINE). It's a good idea to get an update from them on any changes in these rules before making any decisions about what to do with your father's house.