What happens when Mom runs out of money to pay the assisted living facility?

A fellow caregiver asked...

My mother has been diagnosed with Ad about a year ago. She moved in with me 4 yrs ago when I had an apartment. 3 yrs ago we bought a house together. The house is in both our names with right of surviorship. My mom has health insurance through her retired Federal Blue cross plan. She has no long term insurance. I know with the income she gets monthly and her assets, she doesn't qualify for any assistance. When it becomes time that she needs assisted living. I know she will be paying it all on her own. My question is that if she runs out of all her money. Can they try to take half the house or when I go to sell the house yrs from now. Will the state(medicaid) try to collect on half of the proceeds? We live in Pennsylvania, Phila Thank you, I have been to an elder law attorney and she says they cant take the house, however, as I am reading all these posts, I see Medcaid can try to take the house or half of the proceeds after her death. Thanks again

Expert Answer

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for Caring.com.

In Pennsylvania, Medicaid does not cover assisted living. As you indicated, your mother will have to pay privately when the time comes. When she runs out of money, she will need to move to a nursing home where she can be covered by Medicaid. It is a good idea to make this move before she runs out of money so that she can pay privately and get into a home of her choice. You need to contact facilities to find out how much private pay they require before accepting Medicaid. Regarding the house, there are several issues. First, the house is in both of your names and you are joint owners. Did you each contribute an equal amount to purchase the house? If so, in Medicaid's eyes, you are the owner of half of the house and your mother owns the other half. If your mother goes on Medicaid, a lien can be placed on her half of the house. If your mother contributed more than half of the money, the amount over one half was a gift to you. If she contributed the whole amount, Medicaid will consider that a gift of half of the house. If your mother needs Medicaid before 5 years pass from the time of the purchase of the house, she will be penalized if a gift was made. After 5 years, the gift is not an issue because it will be beyond the "look back" period. If you paid for half of the house, gifting does not apply. That said, if an adult child lives with her parent and cares for her parent for at least two years, the house is protected for the child. Medicaid will not put a lien on it. It appears that this is the case for you. At the time of Medicaid application, you will need to prove that you lived in the house and cared for your mother for two years